NVIDIA is doing the iPhone thing

Ben Thompson: Nvidia Earnings, Dollars Per Gigawatt, Open and Hugging Face

Nvidia right now continues to be like Apple in the early years of the iPhone: for years forecasting was easy and reliable, because the company’s revenue was a function of how many phones they could make and how many carriers they supported; we didn’t truly know what iPhone demand was until the iPhone 6S generation, when supply was sufficient and every carrier had the iPhone.

We’re seeing the same story here: Nvidia’s earnings really ought to be quite boring, because the top-line revenue number is a function of how much supply the company will have in terms of components; we won’t know what demand truly is until supply is abundant.

It is fascinating to see this phenomenon happening again. Years ago, Apple's iPhone revenue wasn't so much based on how much demand there was in the market, it was literally how many iPhones they could manufacture. Today, NVIDIA is in the exact same spot. Their hardware revenue is capped at how much they can build, not how much people will buy. Technically, that's a business problem, but it's the sort of problem you're lucky to have.