---
layout: post
title: "Nvidia's Earnings Call Could Reveal Whether AI's Gold Rush Is Starting to Crack"
description: "With memory prices soaring, Nvidia faces a critical test on whether it can maintain its stunning margins as AI infrastructure scales up."
date: 2026-02-25 02:00:25 +0530
author: adam
image: 'https://images.unsplash.com/photo-1768663319879-e6a2b4c7408f?q=80&w=2070'
video_embed:
tags: [news, business]
tags_color: '#4caf50'
---
Nvidia is about to prove whether the AI boom's most powerful story can actually sustain itself. After the bell on Wednesday, the chip giant will report its fourth-quarter earnings, and this time around, Wall Street isn't just looking for another blowout quarter. They want to know if the company can hold the line on profitability while the entire industry's infrastructure costs are spiraling upward.
The numbers on paper look predictable. Analysts expect revenue to hit roughly $60 billion, representing 68% growth from last year. That would extend Nvidia's frankly absurd streak to 11 straight quarters of growth above 55%. The <a href="https://infeeds.com/tags/?tag=business">business</a> has been riding the AI wave so hard that it barely looks real.
But here's where things get interesting.
## The Memory Problem Nobody Wants to Talk About Yet
Memory prices are going crazy right now. We're talking about a global shortage that's caught everyone off guard. Micron's business chief basically said their supply can't come close to meeting demand, and when a memory company says that, you know you've hit a wall.
For Nvidia, this matters enormously. Memory isn't some peripheral component in their AI systems. It's absolutely critical. Those GPUs they're selling for absurd prices to Alphabet, Amazon, Meta, and Microsoft? They need quality memory to function. And when memory gets expensive, one of two things happens: either Nvidia absorbs the cost and watches its margins compress, or they try to pass it on to customers.
Nvidia has been remarkably good at the latter. The company guided for around 75% gross margins this quarter, up from 73.5% the quarter before. That's the kind of margin most software companies would kill for, and Nvidia is doing it while making actual physical hardware.
## The Margin Question That Could Rattle Everything
Here's what investors are really waiting to hear: can Nvidia keep those margins in check while memory costs are climbing?
Analysts at Cantor think the company might actually come in slightly higher than guided, which is bonkers if you think about it. They're betting that Nvidia's management team has enough leverage with its customer base (the hyperscalers are basically its only customers at this point) to negotiate early and lock in supply chains before prices explode further.
The combined capital expenditure from Alphabet, Amazon, Meta, and Microsoft alone could hit $700 billion this year as they build out their AI infrastructure. That's an incomprehensible amount of money, and most of it flows directly to Nvidia. When you have that much leverage, you can probably convince your suppliers to play ball.
But leverage only goes so far when you're dealing with a genuine shortage.
## What the Hyperscalers Hinted at Already
We already got some hints about what's coming when the four major tech giants reported their own quarterly results weeks ago. They're all deploying AI infrastructure at scales we've never seen before, and they're all being cagey about what the actual costs are. That's never a great sign.
If you read between the lines of their guidance, what you see is companies that are still willing to spend heavily but also increasingly aware that the bill is getting serious. They're not pulling back yet, but the tone has shifted from "build it all, we need to move fast" to "build it strategically, we need to watch the returns."
Nvidia needs to convince people that despite all this spending, the economics still work. That memory prices won't squeeze them. That the <a href="https://infeeds.com/tags/?tag=technology">technology</a> isn't commoditizing. That the next quarter's growth will still be north of 65%, pushing toward $72.6 billion.
The real test isn't whether Nvidia beats estimates. It's whether management can convince anyone that this growth rate has years left in it, not quarters.
Management will get on the earnings call at 5 p.m. ET to walk through all of this, and that's when things get real. Because at some point, every boom either becomes a sustainable business or it doesn't, and Nvidia is at the exact moment where investors need to see evidence it's the former.
