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A lot of people have been asking me lately: after this memory run-up, this selloff, and then all the back-and-forth chopping, is the rally finally over?
The recent phase is this: the compute premium is gradually being passed down into the mid-layer of hardware—though some are hoping it will spread to software as well.
NVIDIA's earnings already told us this: massive storage demand from inference, large-model training, and supercomputing expansion is bound to exceed expectations. But the margin path—non-GAAP gross margin gradually declining from 75%—is expected to bottom in Q4'27 at 71%–72%, then recover to 72%–73% in FY2028, still below the 75% peak and not fully back to previous highs.
Market demand hasn't collapsed—what's squeezing the giants' margins is the sharp rise in memory costs (HBM/DRAM). NVIDIA management also explicitly attributed the margin pressure to rising memory prices on the earnings call.
NVIDIA gives, memory takes—this profit-shift cycle runs at least through the end of 2027.
So memory is still in a real earnings upcycle, and the boom is far from over.
Plenty of people treat memory as one monolithic group and mindlessly go all bullish or all bearish on it. That definitely isn’t the whole story.