Nvidia stock moved slightly higher in pre-market trading on Monday, August 24, gaining around 0.09%. The move came after a report revealed that major customers are facing AI server price hikes of more than 15%.
The price increases affect systems using Nvidia’s Vera Rubin and Grace Blackwell chips. The exact size of the hike depends on the chip and memory configuration involved.
Memory costs are the main driver behind the increases. High-bandwidth memory remains in tight supply, pushing up costs across the AI server market. Samsung, SK Hynix, and Micron are the key suppliers caught in the crunch.
Server makers have already notified customers about the coming increases. Microsoft, Alphabet’s Google, and Oracle are among the large data-center operators expected to pay more.
For Nvidia, the pricing news points to strong demand and solid pricing power. Customers are still expanding their data centers and absorbing higher costs to do it.
All eyes are on Nvidia’s fiscal Q2 earnings report, due Wednesday, August 26. Wall Street expects revenue of around $92.2 billion, which would be nearly 95% higher year over year, and adjusted EPS of $2.09.
Nvidia has beaten analyst forecasts in each of its last 14 quarterly reports. But that track record hasn’t stopped the stock from selling off after earnings. NVDA dropped 9.39% in the two days after its February report and fell 5.52% over nine days following the May release.
That pattern creates a tricky setup for investors. Strong results have not been enough to sustain the stock in the short term, which raises questions about what Wednesday’s report needs to deliver.
Despite the post-earnings volatility, Wall Street remains firmly in Nvidia’s corner. All 26 analysts tracked on TipRanks currently rate NVDA a Buy as of August 24.
The average 12-month price target sits at $301.82, suggesting upside of around 40% from current levels.
Nvidia’s stock is up roughly 9.80% since its February earnings report. But it has slipped 3.92% since May, a reminder that the AI-driven gains of previous years are no longer automatic.
Nvidia signed a $500 billion infrastructure funding memorandum of understanding recently, and reports on August 23 indicated a possible investment in Perplexity at a $30 billion valuation.
Wednesday’s earnings report will be the next major test of where Nvidia stands.
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