Nvidia investors beware: Firm flags 2 risks after better-than-expected Q2 earnings

Nvidia’s AI boom, stellar Q2, and an even better guidance for 2028 has brought to the shore a set of challenges, with the chipmaker warning that memory shortages will weigh on margins and rising debt could put pressure on its financial condition and cash flows.

1.) Nvidia margins to bottom in fiscal fourth quarter

Nvidia expects its gross margin to decline and bottom out in the fourth quarter of fiscal 2027, at 71% to 72%, with higher memory prices partly responsible for the pressure.