Analyst Dan Ives Says Nvidia's Higher Prices Signal Strong AI Demand
Dan Ives of Wedbush argues that Nvidia's recent price hikes for AI server systems reflect continued strong demand and supply constraints rather than a warning sign.
Wedbush analyst Dan Ives told Bloomberg Television that Nvidia's roughly 15% price increase for its AI server systems indicates persistent supply constraints in the AI infrastructure market, with hyperscalers and enterprises still willing to absorb higher costs. He said demand for chips is outpacing supply by a ratio of about 15 to 1, and that a current memory shortage is forcing Nvidia and other manufacturers to pass rising component costs through the supply chain.
Ives expects the memory shortage to continue, describing it as a "memory super cycle" that may not reach a meaningful supply-demand balance until the middle or later part of 2028. He noted that major customers such as Microsoft, Alphabet and Oracle are facing higher data-center system costs but see little evidence that these costs are prompting order reductions.
According to Ives, hyperscalers are likely to keep raising capital and expanding capital expenditures, keeping the AI build-out in its "third inning" with accelerating enterprise adoption. He added that Nvidia's upcoming earnings will test whether the company can raise system prices without slowing orders, which would demonstrate pricing power and resilient AI budgets.
Investors are advised to monitor data-center revenue growth, gross margins, demand for Nvidia's Vera Rubin chips and management commentary on memory costs as indicators of the company's near-term performance.