Bank of America believes investors are overestimating HBM cost pressures and underestimating NVIDIA's pricing power, backed by $119 billion in prepurchase commitments. Total rack pricing is expected to rise by $2–3 million, escalating from ~$3–4 million to $6–7 million, despite HBM content per rack increasing by only ~$0.2–0.3 million from Blackwell to Vera Rubin. NVIDIA's sales to hyperscalers grew 115% Year-over-Year, nearly double the overall cloud capex growth.
NVIDIA's ability to raise rack prices significantly beyond HBM cost increases demonstrates its pricing power and supply chain control, driving higher compute infrastructure costs.