--- title: "NVIDIA Earnings in the Spotlight: The Rubin Cycle, Circular Financing, and Long-Term Market Share" type: "News" locale: "en" url: "https://longbridge.com/en/news/296700716.md" description: "NVIDIA is set to release its quarterly earnings next week. Brokerages expect strong fundamentals, with Jefferies forecasting July-quarter revenue of $95 billion, surpassing market consensus. However, market focus has shifted beyond single-quarter performance to three long-term issues: whether Rubin can successfully succeed Blackwell, whether AI demand will continue to outstrip supply, and the financing responsibilities required to lock in future demand" datetime: "2026-08-23T10:57:04.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296700716.md) - [en](https://longbridge.com/en/news/296700716.md) - [zh-HK](https://longbridge.com/zh-HK/news/296700716.md) generator: "portal-rs" --- # NVIDIA Earnings in the Spotlight: The Rubin Cycle, Circular Financing, and Long-Term Market Share NVIDIA will announce its quarterly earnings for the period ending in July next week. Following the rhythm of the past few quarters, the market is no longer surprised by "beating expectations and raising guidance." What truly determines stock price elasticity are three longer-term issues: **whether Rubin can smoothly take over from Blackwell, whether AI demand remains significantly greater than supply, and how much financing and balance sheet responsibility NVIDIA must assume to secure future demand.** From broker expectations, fundamentals remain robust. According to Zhuifeng Trading Desk, Jefferies released a preview report this week, expecting NVIDIA's July-quarter revenue to reach $95 billion, higher than the market consensus of approximately $91.9 billion; the October-quarter revenue guidance is expected to reach $108 billion, also exceeding the market expectation of about $103.7 billion. Morgan Stanley's report is relatively conservative, estimating July-quarter revenue at around $91.2 billion and October-quarter revenue at about $102.3 billion. However, it also believes that recent trends will continue, with single-quarter revenue potentially continuing to increase quarter-over-quarter by approximately $10 billion. **In other words, the core of the current market debate is whether the growth curve for 2027 and 2028 can continue to be revised upward after delivering strong results.** ## Blackwell Remains Strong, But Rubin Is the Next Valuation Narrative In the short term, demand for Blackwell remains strong. Microsoft and Amazon's cloud businesses showed more significant improvement during the quarter, and long-term commitments to computing power from OpenAI, SpaceX, and others continue to support market confidence in NVIDIA's data center revenue. **Morgan Stanley points out that even though Rubin has not yet made a substantial contribution, NVIDIA's current growth is already quite strong; greater acceleration may occur after the January quarter next year.** Rubin is one of the most important keywords in this earnings call. **Jefferies believes that Rubin's ramp-up speed may be significantly faster than Blackwell's initial phase.** The reason is that Rubin continues the 72-GPU Oberon NVL72 rack form factor, allowing it to reuse the liquid-cooled data center deployment and manufacturing foundation accumulated from GB200 and GB300. At the same time, the new generation design reduces a large amount of manual cabling and pipeline installation. Management previously mentioned that the assembly time for compute trays is expected to be shortened from about 2 hours to 5 minutes. **The significance behind this is that NVIDIA is upgrading AI chips into replicable, scalable "AI factory systems."** **Jefferies expects that VR/R200's share of NVIDIA's GPU revenue will reach about 12% in the third quarter of fiscal 2027, rise to over 40% in the fourth quarter, and become the dominant revenue source in the first quarter of fiscal 2028.** If this pace materializes, the market's valuation logic for NVIDIA will shift from "how long the Blackwell cycle can last" **to "whether Rubin can open up the next round of higher-base growth."** ## Vera CPU: Not the Main Course, But Completes "Full-Stack Control" In addition to GPUs, the Vera CPU is another incremental factor worth watching in the earnings report. Jefferies expects NVIDIA's CPU revenue in fiscal 2027 to reach $20 billion, including Grace and Vera; its calculations show that CPU revenue accompanying GPU sales is about $8.65 billion, while independent Vera CPU revenue is about $11.35 billion, with exit annualized revenue in the fourth quarter approaching $32 billion. **In terms of absolute volume, CPUs still cannot be compared to NVIDIA's AI GPU business, serving more as the "icing on the cake." However, the strategic significance is not low: Vera CPU strengthens NVIDIA's control in AI server and AI factory architectures through low-power LPDDR5X and NVLink coherent connections with the Rubin domain.** This will also create new pressure on AMD and Intel. Especially as large customers increasingly tend to purchase entire racks and complete systems, NVIDIA is selling a complete computing platform from GPUs, CPUs, and networking to software. ## OpenAI Mega-Deal: Locking in Demand, But Raising "Circular Financing" Questions Of greater concern to the market is NVIDIA's long-term computing arrangements related to OpenAI. According to Jefferies' analysis, NVIDIA has reached an arrangement with SB Energy, whereby SB Energy will build, own, and operate the PORTS-Pike Technology Campus in Ohio and provide it to OpenAI under a 20-year lease, with NVIDIA as the exclusive computing supplier. NVIDIA will provide credit support for the initial 4.25 GW of IT capacity and hold an option for the remaining 3.75 GW, totaling up to 8 GW, while investing $1.5 billion in SB Energy. NVIDIA stated that each generation of system deployment at this base could correspond to approximately 1.5 million GPUs, generating $150 billion to $200 billion in revenue; OpenAI's existing and planned commitments total about 12 GW, expandable to 16 GW, corresponding to approximately $600 billion in NVIDIA computing purchases before 2030. **This undoubtedly provides a clearer anchor for NVIDIA's forward orders. But the market will also ask: How much of this demand is spontaneous capital expenditure by customers, and how much needs to be driven by NVIDIA through credit support, investment, or revenue sharing?** Morgan Stanley believes that financing, market share, and gross margin are the three major points of controversy currently concerning investors. NVIDIA management will likely emphasize that these structures help accelerate AI infrastructure construction, but investors need to see clearer accounting disclosures, including details on contingent obligations, lease and electricity payment support, residual value commitments, etc. This determines whether the market views it as "locking in future revenue" or worries it becomes "trading balance sheet for growth." ## Gross Margin and Cost Pressure: Stable in the Short Term, Long Term Still Needs Verification NVIDIA's high gross margin has always been an important basis for its valuation premium. Morgan Stanley expects the company may continue to maintain its description of fiscal 2027 gross margin in the "mid-70% range." But pressure does exist. Costs for HBM, DRAM, advanced packaging, substrates, and front-end wafers are still rising, and the ramp-up phase of new products is usually accompanied by yield, testing, and supply chain friction. Morgan Stanley warned that the market consensus expectation of a significant recovery in gross margin in the second half of fiscal 2028 may be slightly optimistic. This means that if NVIDIA gives a more cautious statement on medium-to-long-term gross margins during the conference call, it may trigger short-term volatility; however, if management can explain cost locking, pricing power, and system-level sales structure, it could instead become a "clearing of expectations." ## The Biggest Bottleneck May Not Be Chips, But Electricity As AI capital expenditure progresses further, electricity is likely to become the most realistic constraint. Jefferies points out that the gap between expected chip demand and grid supply capacity is widening. Large cloud providers are increasingly cooperating with utility companies to build dedicated gas power plants and transmission facilities, while frontier AI labs and new cloud providers are increasingly adopting "behind-the-meter" power solutions to bridge the time lag between grid connection timelines and computing deployment. This does not mean that AI infrastructure expansion will stop, but it will make the rhythm of converting orders into revenue less linear. Solutions such as gas turbines, backup power supplies, and fuel cells are being advanced, but equipment delivery cycles, grid connection approvals, local regulations, and community acceptance will all affect data center construction progress. Nuclear power and small modular reactors are more likely to be variables after 2030. **Therefore, NVIDIA's core challenge in the coming years is whether customers' data centers, power supply, and financing can keep pace synchronously.** ## Clarity Is the Stock Price Catalyst Morgan Stanley maintains its "Overweight" rating and top pick status for NVIDIA, with a target price of $288, pointing out that NVIDIA's current P/E ratio of about 17x for FY28 is not expensive compared to its own history, semiconductor peers, and the broader market. But low valuation itself does not necessarily bring immediate gains. Over the past four quarters, even though NVIDIA delivered strong results, its stock price reacted negatively the next day, indicating that the market has already viewed "beating expectations" as the default script. What will truly drive valuation repair next is whether management can clearly answer four questions: > 1. Beyond the October quarter guidance, will the January quarter see significant acceleration due to Rubin; > 2. Whether the Rubin ramp-up is smooth enough to maintain product leadership; > 3. How large are the financing responsibilities behind long-term agreements like those with OpenAI; > 4. Whether power, regulatory, and cost pressures will affect the delivery rhythm after 2027. Overall, NVIDIA's earnings report is likely to remain strong. But the market has entered the next stage: no longer satisfied with just seeing demand, but wanting to see how demand is realized through supply, power, financing, and profit margins. NVIDIA's story remains grand, and short-term performance has support; however, as AI infrastructure investment enters the trillion-dollar level, what investors need to assess is whether the entire AI industrialization system can continue to operate. ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [JEF.US](https://longbridge.com/en/quote/JEF.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [SOXS.US](https://longbridge.com/en/quote/SOXS.US.md) - [SSG.US](https://longbridge.com/en/quote/SSG.US.md) - [USD.US](https://longbridge.com/en/quote/USD.US.md) - [SOXW.US](https://longbridge.com/en/quote/SOXW.US.md) - [SOXM.US](https://longbridge.com/en/quote/SOXM.US.md) ## Related News & Research - [Nvidia Earnings: Wall Street Expects Growth to Slow in Q2 — Dan Niles Says Hyperscalers Are Spending Like Never Before](https://longbridge.com/en/news/296822352.md) - [Alibaba Gives Nvidia's Older AI Chips an Unexpected Vote of Confidence](https://longbridge.com/en/news/296532983.md) - [Nvidia Q2 Preview: Strong Earnings and Low Valuation Set the Stage for Upside](https://longbridge.com/en/news/296688005.md) - [Nvidia to use Poolside deal to build alternative to Chinese AI, WSJ says](https://longbridge.com/en/news/296727449.md) - [Nvidia Warns Customers Of Upcoming Price Hikes](https://longbridge.com/en/news/296798848.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**