Why Nvidia investors are missing the forest for the trees

Nvidia Corp. investors showed their disappointment in the chip maker’s earnings by obsessing over a previously anticipated slight drop in gross profit margins, but they are missing the forest for the trees.

Nvidia’s GAAP gross margins — forecast at 73% for the company’s fiscal fourth quarter — are still enviable across the semiconductor industry. As one analyst told MarketWatch on Wednesday, “Many companies would chew their arm off for a mark-up of over 70%.”