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<\/p>\nKey Points<\/p>\n
Nvidia is, no doubt, facing higher supply chain costs, mainly due to higher transportation costs stemming from soaring crude oil prices.<\/p>\n
Nvidia\u2019s GPUs are in such great demand that it might be able to pass at least part of its increased supply chain costs onto customers, at least those with whom it didn\u2019t already have contracts with definitive pricing.<\/p>\n
Some of you who own Nvidia(NASDAQ: NVDA) stock or are considering buying the artificial intelligence (AI) chip and infrastructure leader’s stock might be wondering if the Iran war, which began on Feb. 28, will hurt Nvidia’s financial results. Let’s explore this question.<\/p>\n
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Image source: Getty Images.<\/p>\n
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue \u00bb<\/a><\/p>\n Supply chain costs are already rising<\/p>\n An increase in supply chain costs is probably already hurting Nvidia’s financial results (and those of many other companies). This increase in supply chain costs is mainly due to significantly higher transportation costs stemming from soaring crude oil prices.<\/p>\n Crude oil prices have skyrocketed since the war began. This is because Iran has effectively closed the Strait of Hormuz to oil tankers and other ships. This narrow waterway, which is off Iran’s southern coast, is critical for the global oil supply since about 20% of the world’s oil passes through it.<\/p>\n Surging crude oil prices have already driven up the prices of various distillates, including gasoline, diesel fuel (used by many delivery trucks), jet fuel (used by many aircraft, including cargo planes), heavy fuel oil (used by most cargo ships), and heating oil. These increases have boosted select oil stocks<\/a>, but have hurt many other stocks.<\/p>\n Nvidia sources components from around the world, particularly Taiwan, where Taiwan Semiconductor Manufacturing manufactures its graphics processing units (GPUs). Nvidia reportedly primarily transports its GPUs from Taiwan to the U.S. using rapid air freight. An increase in inbound freight costs for its components will likely hurt Nvidia’s gross margin and, in turn, its profit margin.<\/p>\n Moreover, increased transportation costs will increase its delivery costs to customers, hurting its operating and profit margins.<\/p>\n But — here’s the good news<\/p>\n While I expect that increased supply chain costs will impact Nvidia’s financial results, the impact should be minimal unless the war \u2013 and effective closure of the Strait of Hormuz \u2013 drags on for a long time.<\/p>\n While Nvidia isn’t immune to higher transportation costs, its status as a massive company and customer should give it some leverage with transportation companies.<\/p>\n Moreover, Nvidia’s AI<\/a>-enabling GPUs are in such great demand that it might be able to pass at least part of its increased supply chain costs onto customers, at least those with whom it didn’t already have contracts with definitive pricing.<\/p>\n Lastly, I expect Nvidia’s fiscal first-quarter results (which should be released in late May) to be powerful and once again sprint by Wall Street’s estimates, as did its fiscal Q4 results<\/a>. This opinion is based on CEO Jensen Huang’s extremely bullish comments at the company’s GTC 2026, the world’s largest AI conference, earlier this month.<\/p>\n In other words, a small-to-moderate impact from the Iran war shouldn’t make much of a difference. Nvidia has gross, operating, and profit margins to spare, so to speak. In its last fiscal year (fiscal 2026, ended late January), its adjusted gross margin and adjusted profit margin were 71.3% and 54.2%, respectively. For context, in its last fiscal year, chipmaker<\/a>Advanced Micro Devices (AMD) — Nvidia’s primary GPU competitor — had an adjusted gross margin of 52.4% and an adjusted profit margin of 19.7%.<\/p>\n Granted, Nvidia stock has been stuck in a relatively tight trading range for some time, but that’s partly because the Iran war has hurt the overall market for over three weeks. The stock is still on track to be a big winner over the mid- and long-term.<\/p>\n Should you buy stock in Nvidia right now?<\/p>\n Before you buy stock in Nvidia, consider this:<\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks<\/a> for investors to buy now\u2026 and Nvidia wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you\u2019d have $503,592!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you\u2019d have $1,076,767!*<\/p>\n Now, it\u2019s worth noting Stock Advisor\u2019s total average return is 913% \u2014 a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.<\/p>\n See the 10 stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of March 24, 2026. <\/p>\n Beth McKenna<\/a> has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy<\/a>.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"Key Points Nvidia is, no doubt, facing higher supply chain costs, mainly due to higher transportation costs stemming…\n","protected":false},"author":2,"featured_media":558786,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,2640,2637,2636,2639,2638,2641,103573,7109,1837],"class_list":["post-558785","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-futures","tag-index-market-quote","tag-index-market-quotes","tag-index-market-symbol","tag-index-market-symbols","tag-indices","tag-intc","tag-intel-corp","tag-the-globe-and-mail"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/558785","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=558785"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/558785\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/558786"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=558785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=558785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=558785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}