Nvidia's Supply Commitments Rise Sharply to $279 Billion Amid Memory Price Increases
Nvidia (NASDAQ:NVDA) reported strong second-quarter fiscal 2027 results, with revenue reaching a record $96.2 billion — up more than double year-over-year. Data center sales surged by 117% to $89.0 billion, driving the company's performance. Despite these gains, Nvidia’s gross margin guidance for Q3 was slightly reduced from 75% to 74%, with CFO Colette Kress noting that memory costs are rising faster than expected. The most significant development came in the form of supply commitments: they have more than doubled since last quarter to $279 billion, largely due to procurement for AI-related memory. The company is locking down components through fiscal 2029 and has increased inventory by nearly $6 billion ahead of launching its next-generation platform. Nvidia plans to absorb most of the rising costs in Q3 but expects to pass some along later as prices increase further, with gross margins expected to bottom out at around 71-72% before stabilizing. Despite this guidance shift and inventory build-up, shares rose nearly 5% after hours due to strong investor confidence.
Tickers: $NVDA
Topics: data center growth semiconductors supply commitments