Nvidia's AI Chip Dominance Faces New Scrutiny

• Nvidia's Q4 results surpassed Wall Street estimates, but shares declined after hours.
• Increased inventory levels and supply commitments through 2027 sparked concerns about margin sustainability.
• Analysts question Nvidia's ability to maintain high gross margins beyond 2027.
• Broader semiconductor sector experiences pressure, impacting investor sentiment.

Big Numbers, Big Questions

Folks, let me tell you, Nvidia had a tremendous quarter, really tremendous. They beat all the expectations, just like we used to beat China at the negotiating table – the best, believe me. But even with these fantastic numbers, some people are starting to ask questions, tough questions. It reminds me of when they said I couldn't win. They were wrong then, and, well, time will tell if they're wrong now. The best chips, everyone agrees, the best.

Inventory Surge and the Future of Margins

Now, some are saying Nvidia's CFO, a very smart person, by the way, mentioned that their inventory is up. Up 8%, can you believe it? Some people are saying this is bad. It's like having too much gold, folks. But the real question is about margins. They've been fantastic, the best margins, frankly. But can they keep it up? It's like asking if we can keep America great. The answer is, of course, yes. And for those looking into affordable housing, you might be interested in this article Raiders of the Lost Housing Market Affordable Homes on the Horizon.

Moore's Law and Generational Performance

Nvidia's CEO, Jensen, a smart cookie, says they can keep those margins high by delivering 'generational performance per watt.' He's talking about making chips that are so good, so efficient, they make Moore's Law look like child's play. It’s like building a wall that's so beautiful, so strong, everyone will want one. And they'll pay for it.

Peak Pricing Power?

The worry is, have they already reached their peak? Have they charged as much as they can for these AI chips? Are they going to have to start cutting deals? It's like saying, 'Can we make America even greater?' The answer is always yes. We’re always working to make the best deals.

Broader Market Pressures

It's not just Nvidia, folks. The whole semiconductor space is feeling the heat. The PHLX Semiconductor Index is down. It's like a little dip in the polls. But you know what? We always bounce back, bigger and better than ever before. The best is yet to come.

The Art of the Deal Continues

So, what does it all mean? It means Nvidia is still a powerhouse. They are still the best. But they need to keep innovating, keep pushing, and keep making great deals. It's all about the art of the deal, folks. And nobody knows the art of the deal better than I do. Believe me.