Nvidia networking revenue nears $17 billion as AI data centers expand
This digest was compiled by AI from multiple sources — links to the originals are below.
Nvidia's networking business generated nearly $15 billion last quarter, up from roughly $3 billion per quarter two years ago. Wall Street expects that figure to approach $17 billion when the company reports earnings on Wednesday. Networking growth is slowing but still outpaces compute, even as Nvidia stock has traded sideways while the broader chip sector fell into a bear market.
Key Facts
- Nvidia's networking operation generated nearly $15 billion last quarter, up from roughly $3 billion per quarter two years ago.
- Wall Street expects networking revenue to approach $17 billion when Nvidia reports earnings on Wednesday.
- Networking grew nearly 200% year over year last quarter, compared with 77% for compute.
- Analysts expect networking growth of roughly 134% in the upcoming quarter, still ahead of compute at about 100%.
- Since the semiconductor trade peaked around June 22, Nvidia stock has gone essentially nowhere, while the iShares Semiconductor ETF (SOXX) has fallen roughly 20%.
Networking Growth
Nvidia has quietly built a networking operation that generated nearly $15 billion last quarter, up from roughly $3 billion per quarter two years ago. Wall Street expects that figure to approach $17 billion when the company reports earnings on Wednesday. Compute still dwarfs networking inside Nvidia's Data Center business, but networking has been growing faster, up nearly 200% year over year in the last quarter compared with 77% for compute. That pace is slowing, with analysts expecting networking growth of roughly 134% in the quarter about to be reported, still ahead of compute at about 100%.
Competitive Landscape
Alphabet, Amazon, Microsoft, Meta Platforms, and other hyperscalers are spending billions developing or commissioning custom processors that can handle some workloads without an Nvidia GPU. Those chips still have to talk to one another, and as AI data centers connect thousands of accelerators into giant computing systems, moving data among those processors becomes a challenge in its own right. That has pushed the AI trade deeper into networking, memory, storage, and other infrastructure. Jessica Inskip, director of investor research at StockBrokers.com, described Nvidia's strategy on Yahoo Finance's Opening Bid on Tuesday as "investing in the bottlenecks that are the AI infrastructure."
Market Performance
Nvidia's stock has already been acting differently from much of the chip industry, trading sideways over roughly the past two months while semiconductors fell into a bear market. Since the semiconductor trade peaked around June 22, Nvidia stock has gone essentially nowhere, while the iShares Semiconductor ETF (SOXX) has fallen roughly 20%. As Tuesday's Chart of the Day showed, Nvidia largely avoided the chip bear market that swallowed most of the group.
2 sources
Nvidia networking revenue nears $17 billion as AI data centers expand
