Nvidia Says Memory Pricing Has Turned ‘Extreme’ and Is ‘Headed Even Higher Into Next Year,’ But Its Own Price Increases Are Already Executed

Nvidia's CFO, Colette Kress, revealed during the company's fiscal second-quarter earnings call that the cost of memory is currently "extreme" and is expected to continue rising in the coming year. Memory is a crucial component in various devices such as smartphones, laptops, gaming consoles, and graphics cards. The company highlighted that memory scarcity is primarily driven by the AI buildout, making it a symptom of the same demand surge that is fueling Nvidia's own growth.

Nvidia is the largest single buyer of memory, with supplier purchase commitments of approximately $279 billion in its most recent quarterly filing - $160 billion of which is specifically for memory. Kress stated that Nvidia is absorbing part of the memory cost and passing on the rest to customers, with the company having already decided the extent of these price increases.

Gross margin for the reported quarter was 75%, and Kress guided to 74% for the current quarter, while margins are expected to bottom in the 71% to 72% range in Q4, and settle between 72% to 73% in fiscal 2028 as executed price increases take effect in Q1.