Nvidia () extended the AI runway into 2028, but sticky and Kevin Warsh are stopping the broader market from going full throttle.
Nvidia Fires Up the Chip Complex
Asia is not tepid this morning. It is bifurcated.
Nvidia has fired a flare directly over the semiconductor complex, lifting the by around 1% and putting , and Kioxia at the front of the pack. Yet the broader MSCI Asia-Pacific index is only modestly higher, while futures have surrendered part of an initial 1.3% jump.
The Nvidia halo is working. It simply is not illuminating the entire market.
And the numbers were hardly short of spectacular. Revenue reached $96.2 billion, more than double last year’s level and roughly $4 billion above expectations. Data-centre sales hit $89 billion, while current-quarter guidance of $108 billion comfortably cleared the Street. Nvidia’s official results
But the real rocket fuel came from further down the runway. Nvidia forecast approximately 70% revenue growth for the fiscal year ending January 2028, compared with Wall Street expectations closer to 44%.
That is not moving the goalposts. It is loading them onto a truck and driving them across the state line.
Vera Rubin is already shipping and could represent one-fifth of data-centre revenue this quarter. AI laboratories may account for one-quarter of Nvidia’s total business next year, while AWS plans to deploy another two million Nvidia GPUs during 2027 and 2028. Demand is apparently accelerating even at Nvidia’s current scale, with supply still struggling to keep pace.
That explains the heat under Asian memory shares. Nvidia expects higher memory and component costs to push gross margins down toward 71%-72% in the fourth quarter. Nvidia’s margin pressure is SK Hynix and Samsung’s pricing power. High-bandwidth memory has become the toll booth on the AI superhighway, and every new GPU convoy has to pay.
But is keeping the champagne bottle raised rather than smashed across the hull, preventing Nvidia’s lift from becoming a full all-boats launch.
July inflation held at 3.7%, remained at 3.3%, and the has climbed toward 4.22%. Markets are now pricing another by December. Nvidia controls the earnings numerator, but Kevin Warsh is about to weigh in on the discount-rate denominator.
Few traders are likely to push every engine to maximum thrust before Warsh delivers his first Jackson Hole address as Fed chair. If he signals that persistent inflation requires another turn of the screw, the AI earnings runway may remain long, but the financing cost attached to it will be steeper..
Falling oil offers some relief, with near $87/bbl as diplomacy around the Strait of Hormuz improves. But flows through the strait remain disrupted, diesel inventories are historically tight, and the squeeze is being compounded by another Ukrainian strike on Russia’s refining system. The overnight attack set Lukoil’s NORSI refinery ablaze—Russia’s fourth-largest refinery and second-largest gasoline producer. Crude is shedding a little geopolitical fear; the products market is still accumulating it
So this is a real Nvidia rally, but a selective one.
The chipmakers and memory suppliers are already airborne. The broader market is still circling the runway, waiting for Warsh to clear the macro airspace.