Nvidia guided its gross margin for the quarter it reports on 17 November to “74.0%, plus or minus 50 basis points”. That is 0.9 points below the 74.9% it guided for each of the two quarters before, and the first time since February 2025 that a GAAP margin guide came in below the previous one, by our count of its filings.
At the guide midpoints, $108.0 billion of revenue at a 74.0% margin is $79.9 billion of gross profit, 10.8% above the second quarter’s $72,142 million, by our arithmetic. Our preview of the report covers the revenue side.
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The key insight: As we read the filings, the 74.0% guide is notable for its direction rather than its size: Nvidia‘s reported margins have met or beaten its guide in seven of the last eight quarters, so a lower guide is the company’s own signal on the quarter, set in August.
Nvidia’s GAAP gross-margin guides for the quarters from October 2024 to October 2026 were 74.4%, 73.0%, 70.6%, 71.8%, 73.3%, 74.8%, 74.9%, 74.9% and now 74.0%, from its CFO commentaries. The reported GAAP gross margins for the first eight of those quarters were 74.6%, 73.0%, 60.5%, 72.4%, 73.4%, 75.0%, 74.9% and 75.0%, by our arithmetic from its incomestatements.
In seven of the eight quarters, the reported margin landed between 0.03 and 0.62 points above the guide, by our arithmetic. The exception was the first quarter of fiscal 2026, at 60.5% against a 70.6% guide; the press release says that quarter carried a $4.5 billion charge for H20 inventory and purchase obligations and that “Excluding the $4.5 billion charge, first quarter non-GAAP gross margin would have been 71.3%”.
Nvidia GAAP gross-margin guide against the margin it reported for each of the last eight quarters, from its CFO commentaries and incomestatements; reported margins are our arithmetic.
The Last Lower Guide
The previous lower guide came on 26 February 2025, when Nvidia guided the first quarter of fiscal 2026 to 70.6%, 2.4 points below the 73.0% before it, by our arithmetic. The guides then rose for four quarters and held at 74.9% for two.
Nvidia’s latest CFO commentary does not give a reason for the 74.0% guide. On the second quarter it says: “GAAP and non-GAAP gross margins were approximately flat sequentially as our Blackwell architecture remains the vast majority of our revenue”.
The Structural Read
As we read the series, the margin guide had climbed from 70.6% to 74.9% across four quarters after the H20 charge, then held for two before the step down to 74.0%.
As we read the dollars, the lower margin still sits on a larger base: 74.0% of $108.0 billion is $79.9 billion of gross profit, 10.8% above the second quarter by our arithmetic.
NVIDIA CFO Commentary, second quarter fiscal 2027, 26 August 2026
“GAAP and non-GAAP gross margins were approximately flat sequentially as our Blackwell architecture remains the vast majority of our revenue.”
Three Implications
FOR INVESTORS Nvidia guided gross margins of 74.0%, plus or minus 50 basis points, for the quarter it reports on 17 November.
FOR THE MARGIN RECORD In seven of the last eight quarters the reported GAAP margin landed 0.03 to 0.62 points above the guide, by our arithmetic.
FOR THE COST SIDE The first quarter of fiscal 2026 shows how a one-off charge moves the margin: a $4.5 billion H20 charge took the reported GAAP margin to 60.5% against a 70.6% guide.
The framework says: “The $1T capex cycle is being underwritten by a $1T concentrated demand commitment from two counterparties whose combined free cash flow is deeply negative.”
As we read it, Nvidia’s gross margin is where the supplier side of that cycle shows its pricing, and its latest guide is 0.9 points below the two before; the framework does not discuss Nvidia’s guidance.
What Is Not Established
Nvidia’s filings do not explain the lower guide, and this piece does not attribute it to any cause. The series compares guides with reported GAAP margins as filed and does not adjust for one-off charges. Our comparison of revenue guides with results found revenue above the top of the range in all eight quarters; the margin record is a separate measure.
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Nvidia’s 74.0% gross-margin guide for the quarter it reports on 17 November is 0.9 points below its two previous guides and its first lower guide since February 2025, while seven of its last eight reported margins landed at or above the guide, by our arithmetic.
A note on sourcing. The gross-margin guides come from NVIDIA’s CFO commentaries and the reported margins from the incomestatements in its earnings press releases, filed as exhibits to its earnings 8-Ks from August 2024 to August 2026 and read on SEC EDGAR on 14 November. Reported margins, gaps and the implied gross profit are our arithmetic. NVIDIA was not contacted for this piece.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
