Jensen Huang Settles Internal Chip Fights, Underscoring NVIDIA's Scarcity Amid Record Revenue

What happened

Even Nvidia teams compete for limited AI chips, with the company's automotive chief revealing that CEO Jensen Huang still steps in to settle internal fights over scarce supply, underscoring the extreme demand environment. This internal allocation strain mirrors the revenue explosion in Q1 FY27, where Data Center revenue hit $75.2 billion, up 92% year-over-year, driven by Blackwell 300 systems. The DeepValue report, however, maintains a WAIT rating at $211, warning that the stock already prices sustained hyperscaler capex and smooth Blackwell conversion without a valuation cushion. While the internal scarcity narrative supports strong near-term demand, it also highlights potential friction points in allocation and execution as NVIDIA manages its complex product ramp. For investors, the core thesis remains unchanged: wait for a lower entry near $185 or evidence that gross margin durability holds above 74% amid growing competition from custom silicon and inference workload diversification.

Implication

The internal chip fights confirm demand intensity, but investors should focus on whether NVIDIA can sustain GAAP gross margins above 74% as inference workloads and custom silicon erode premium pricing over the next 12-18 months.

Thesis delta

The article does not materially alter the investment thesis. It confirms demand intensity but adds a minor execution risk regarding internal allocation disputes. The overall rating remains WAIT, as the stock lacks a margin of safety at current levels.