NVIDIA Stock: 75% Gross Margin Fuels Bullish Outlook

NVIDIA's (NASDAQ: NVDA) reported gross margins held steady at 75% in the latest quarter, underscoring significant pricing power as revenue surged 106% year-over-year to $96.22 billion. Management has guided for 70% fiscal 2028 revenue growth, a figure primarily constrained by supply chain limitations rather than demand.

### Money Play Investors may want to watch NVIDIA (NVDA) as its sustained high gross margins and robust revenue growth indicate strong pricing power and demand for its AI-driven compute solutions.

## Catalyst Analysis: Pricing Power and Supply Constraints NVIDIA achieved $96.22 billion in revenue, a 105.85% increase from the prior year, while its gross margin remained at 75%. This sustained profitability at scale suggests robust pricing power for the hardware manufacturer. Segment revenue for Data Center hit $89.02 billion, up 117% year-over-year, with Networking growing by 138%. Management anticipates gross margins settling between 72% to 73% in fiscal year 2028, supported by executed price increases.

NVIDIA's $279 billion supply commitment, though a potential risk if hyperscaler capital expenditures soften, is currently supported by an estimated $2 trillion cloud industry backlog. The company's operating margin stood at 60.38%, and it reported a 75.4% return on assets. Free cash flow reached $21.34 billion in the quarter, with $26.0 billion returned to shareholders and approximately $99.0 billion remaining on its buyback authorization.

## $NVDA+WL Technical Analysis & Key Risk Watch

### Sector Ripple / Impact on Semiconductors NVIDIA's strong performance and guidance highlight the ongoing demand in the semiconductor sector, particularly for AI-focused components. Competitors like AMD and Intel, while facing different market dynamics, are also part of this expanding ecosystem.

### Story Arc / How We Got Here This report follows previous analysis from August 28, 2026, which viewed NVIDIA's stock as potentially undervalued, drawing parallels to Apple's historical valuation challenges. The prior assessment highlighted investors evaluating NVIDIA's price against future earnings potential, suggesting a possibility for valuation expansion. Further details on prior coverage can be found at /explore/nvidia-stock-viewed-as-undervalued-apple-example-cited.