The one number that will actually move Nvidia’s stock Wednesday night

Nvidia has another blockbuster earnings report after the bell Wednesday, and Wall Street, as per usual, is readying the fireworks. Analysts expect revenue of $78.8 billion, almost 80% higher than just a year earlier. Earnings per share are projected at $1.77, nearly double last year. There’s ample reason to believe Nvidia will meet those lofty goals: according to data from The Motley Fool, the chipmaker has beaten Wall Street’s estimates in 21 of the last 23 quarters, totaling to five years of outperformance. So the reason Nvidia’s earnings are so closely watched isn’t because anyone expects it to suddenly fail. A beat is almost a given. It’s because Nvidia is still the big winner of the AI boom, the company at the center of every hyperscaler’s capital spending plan and every investor’s portfolio anxiety. Its last earnings report in February was a 7% beat on earnings per share. The stock fell 6% that day, and was down 11% a month later, according to 24/7 Wall St. CEO Jensen Huang has bemoaned that no-win dynamic— a stock that can do everything right and still get punished — and it’s why why investors won’t be watching the headline revenue number. They’ll be watching a less famous line, called gross margin. What is gross margin? Gross margin is the percentage of every sales dollar a company gets to keep after paying to make its product. So if Nvidia sells a chip for $100 and it costs $25 to make, the gross margin is 75%. The remaining $75 goes toward everything else— profits, salaries, taxes—but the 75% itself shows how much pricing power a company actually has. For context of how large that gross margin is, a grocery store runs on gross margins around 25%. Walmart hovers near 24%. Apple, often considered one of the most profitable hardware companies in the world, sits near 46%. Microsoft, which at this point sells mostly software, sits at around 70%. Nvidia, which sells physical chips, runs at 75%, a number you a