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Yahoo
2 hours ago
- Business
- Yahoo
Can NVIDIA's End-to-End Stack Keep Driving Networking Revenues?
NVIDIA Corporation's NVDA networking business is gaining strong momentum, thanks to its full-stack approach. In the first quarter of fiscal 2026, networking revenues surged 64% sequentially to approximately $5 billion. The robust growth was driven by the rise in AI factory buildouts and the growing demand from hyperscalers and enterprises building large AI clusters. NVIDIA's networking business focuses on providing high-performance connectivity solutions, including chips, switches, interconnects and software for data centers, which help customers scale their AI workloads more efficiently. The company's NVLink interconnect offers 14 times the bandwidth of PCIe Gen 5 and supports massive data throughput in a single rack. New offerings like NVLink Fusion are attracting custom chipmakers and CPU vendors, adding more partners to the NVIDIA ecosystem. In the last reported quarter, NVLink shipments exceeded $1 billion, showing strong early adoption. NVIDIA's Ethernet networking platform, Spectrum-X, is also expanding quickly. It is now on pace to generate more than $8 billion in annualized revenues. Companies like Microsoft, Meta, Oracle and Google Cloud are already deploying it to handle AI network traffic with low latency and high utilization. As AI workloads grow more complex and interconnected, NVIDIA's end-to-end stack makes it easier and cheaper to scale. If this demand trend holds, networking could become a larger and more stable revenue driver over time. Per our model, the company's revenues from the networking business are estimated to grow 57.7% year over year to $20.5 billion in fiscal 2026. Broadcom AVGO and Marvell Technology MRVL are two major companies that are continuously expanding in the AI networking space. Broadcom offers custom networking chips and high-speed interconnects to major cloud providers. Its strong position in Ethernet switches and application-specific integrated circuits (ASICs) gives it a foothold in the AI infrastructure space. However, Broadcom doesn't offer a complete end-to-end solution like NVIDIA. The company relies more on partnerships with cloud customers rather than offering a unified platform. Marvell Technology is also focusing on data center connectivity and recently launched products tailored for AI and cloud workloads. The company works with major hyperscalers and has a growing presence in optical and Ethernet switching. But like Broadcom, Marvell lacks NVIDIA's software and system-level integration, which limits its ability to capture the full AI networking stack. Shares of NVIDIA have risen around 22.2% year to date against the Zacks Computer and Technology sector's gain of 7.4%. Image Source: Zacks Investment Research From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 33.81, higher than the sector's average of 27.39. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NVIDIA's fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 41.8% and 31.9%, respectively. Estimates for fiscal 2026 have been revised downward over the past 30 days, while those for fiscal 2027 have been revised upward in the past 30 days. Image Source: Zacks Investment Research NVIDIA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Marvell Technology, Inc. (MRVL) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Business Insider
5 days ago
- Business
- Business Insider
‘Stop Crying Bubble,' Says Investor About Nvidia Stock
Nvidia (NASDAQ:NVDA) and records are no strangers, and the chip giant notched another on Wednesday, when the stock crossed the $4 trillion market cap threshold, becoming the first company ever to hit that milestone. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. That saw Nvidia pull further away from closest peers Microsoft and Apple, but if you think the stock might be looking pricey at such an elevated level, then think again. That at least is the opinion of one investor, known by the pseudonym the Agar Capital (AC), who argues that Nvidia's valuation is 'justified by its dominant AI infrastructure, explosive earnings growth, and unmatched margins, not by speculative hype or bubble dynamics.' Indeed, the investor pushes back against the chorus of skeptics who tend to sound the bubble alarm each time Nvidia sets a new high. In AC's view, Nvidia isn't just a 'buzzword' – it's the engine room of a technological revolution, consistently delivering profits and cash flow on a scale that rivals can't match. Far from being 'overvalued,' its current valuation is a reflection of the outsized influence it wields over the future of artificial intelligence. Skeptics, of course, have been voicing the same concerns since Nvidia was worth $500 billion, then $1 trillion, and later $2 trillion. Now, at $4 trillion, those doubts persist. Yet, as AC points out, 'The price isn't the problem. It's the market's incredulity.' What's more, focusing solely on Nvidia's share price overlooks the broader narrative. As AC emphasizes, this is arguably the most 'powerful margin machine' on the planet, with the company raking in $44 billion in revenue and $26 billion in cash in just the first quarter of FY26. About 90% of that revenue now comes from data centers, a segment where margins are still expanding, driven by the rapid adoption of new Blackwell chips and rising demand for Nvidia's proprietary networking technologies, such as NVLink and Spectrum-X. While it's true the stock isn't cheap, labeling it as expensive is also misleading. Nvidia's P/E ratio continues to fall as EPS surges, and the PEG ratio hovers around 1, signaling that growth is keeping pace with valuation. Free cash flow yield remains 'positive and solid.' And compared to peers like AMD, Intel, and Broadcom, Nvidia clearly stands out for its superior profitability, high-quality earnings, and robust returns on capital. Over the years, it has become the backbone of the AI-driven economy, and as AC concludes, 'This is not a bubble. It is a dominant position monetized to the highest degree.' With all of that in mind, it's hardly surprising that Agar Capital rates NVDA shares a Buy. (To watch Agar Capital's track record, click here) Wall Street broadly agrees; based on a mix of 37 Buys, 4 Holds and a single Sell, Nvidia boasts a Strong Buy consensus rating. (See NVDA stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
5 days ago
- Business
- Yahoo
NVIDIA Bets on Sovereign AI: Will It Shield Against Trade War?
NVIDIA Corporation NVDA is facing a major sales hit from U.S. export restrictions, particularly from the ongoing trade war between the United States and China. In the first quarter of fiscal 2026, the company lost $2.5 billion due to blocked shipments of its H20 chips to China, and it anticipates losing another $8 billion in the second quarter. To reduce this trade war risk, NVIDIA is pushing deeper into sovereign AI projects. Sovereign AI refers to countries building their own national AI infrastructure, using trusted platforms to protect data, boost innovation and maintain control over their AI systems. NVIDIA is playing a key role in these efforts. It has announced major AI factory projects in Saudi Arabia, where it plans to deliver 18,000 AI chips. In Europe, it has received strong backing from leaders in France and Germany for its sovereign AI projects. The European Union is aggressively investing in AI with a planned investment of $20 billion to build four AI gigafactories across the region. The company is also partnering with firms like Foxconn and local governments to build AI infrastructure in Taiwan and the UAE. This bodes well for NVIDIA's sovereign AI initiative. Sovereign AI gives NVIDIA a chance to build long-term partnerships in regions not affected by China-related trade controls. These projects will rely on NVIDIA's full-stack solution, including graphics processing units (GPUs), networking tools (like NVLink and Spectrum-X), software platforms (such as CUDA and NeMo) and AI services. Once adopted, this system is hard to replace due to the massive capital investment. While sovereign AI won't fully replace the scale of China's market, it gives NVIDIA access to new territories that want to develop AI infrastructure locally. This could help balance the impact of trade restrictions and support NVIDIA's long-term growth. Two competitors, Advanced Micro Devices, Inc. AMD and Intel Corporation INTC, are also trying to grow in the AI infrastructure space. However, they are far behind NVIDIA when it comes to sovereign AI projects. Advanced Micro Devices is gaining attention with its Instinct MI300X chips, which are designed for large AI workloads. Some major cloud companies like Microsoft and Meta are testing AMD's GPUs. However, Advanced Micro Devices does not yet offer a full-stack solution like NVIDIA. It lacks networking hardware and software tools at the same level as NVIDIA owns. Intel is promoting its Gaudi 3 AI chips as a low-cost option for training and inference. However, Intel's AI ecosystem is still developing, and its overall AI market share remains small. It also does not offer a complete package that ties chips, software and networking together. Both companies are making progress, but NVIDIA's complete system gives it a strong lead. Shares of NVIDIA have risen around 19.1% year to date against the Zacks Computer and Technology sector's gain of 7%. Image Source: Zacks Investment Research From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 33.13, higher than the sector's average of 27.37. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NVIDIA's fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 41.8% and 31.9%, respectively. Estimates for fiscal 2026 have remained unchanged over the past 60 days, while those for fiscal 2027 have been revised upward in the past 30 days. Image Source: Zacks Investment Research NVIDIA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Business Insider
05-06-2025
- Business
- Business Insider
Jefferies Bangs the Drum on Nvidia Stock
Nvidia (NASDAQ:NVDA) shares are back in rally mode. Since hitting a low in early April, following market turmoil sparked by Trump's sweeping tariff plans, the stock has soared 50%. The momentum was fueled by a strong Q1 report that confirmed Nvidia's ability to deliver, even with the China chip ban in effect. Confident Investing Starts Here: Wall Street is taking notice. Jefferies' Blayne Curtis, one of the top 1% of analysts on the Street, just added Nvidia to his elite list of Franchise Picks, signaling renewed conviction in the chipmaker's long-term upside. What's behind its inclusion? The 5-star analyst explained: 'We view NVDA as the dominant supplier of AI accelerators within the data center, an industry that is expanding rapidly due to the development and adoption of AI. The ramp of the co's next-generation Blackwell GPU platform is now fully underway, so GM should improve from the low-70% to mid-70% range throughout the year.' Moreover, sovereign AI is seeing a significant boost, with recent commitments from Saudi Arabia and the UAE to develop their AI infrastructure in partnership with Nvidia. What Curtis thinks the market seems to be overlooking is that Nvidia's revenue guide – roughly in line with Street expectations for next quarter – is actually a 'major positive.' The company managed to absorb around $8 billion in revenue headwinds from the H20 export restrictions to China, which was notably higher than the $5 to $6 billion the Street had anticipated. Looking ahead to the second half of the year, Curtis sees a 'favorable setup' as Blackwell Ultra ramps up and the company continues to see solid momentum in networking (NVLink and Spectrum-X). Curtis also expects a more seamless transition to Nvidia's next-generation Rubin platform, thanks to its architectural similarity to Blackwell. Potential catalysts to look forward to include stronger-than-expected demand for Blackwell, mainly fueled by rising CSP (cloud service provider) spending; further sovereign AI investments; the unveiling of a data center product tailored for China; and increased capital expenditures from hyperscalers. Bottom line, Curtis is backing Nvidia with conviction, assigning a Buy rating and a $185 price target – implying a 31% upside from current levels. (To watch Curtis's track record, click here) That's a pretty common take on Wall Street; based on a mix of 35 Buys, 4 Holds and 1 Sell, NVDA stock claims a Strong Buy consensus rating. Going by the $173.57 average price target, a year from now, shares will deliver returns of ~22%. (See ) To find good ideas for AI stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
04-06-2025
- Business
- Yahoo
NVIDIA Corporation (NVDA) Surges Ahead With $2B Ethernet Push and $1B NVLink Wins
We recently published a list of . In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other AI stocks on Wall Street's radar. On June 3rd, Citi analyst Atif Malik reiterated a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) with a $180.00 price target. The analysts have pointed out Nvidia's strategic focus on artificial intelligence (AI) networking, highlighting the company's efforts to optimize compute and storage with its networking operating system, Dynamo. Dynamo is intended to achieve the lowest total cost of ownership for tokens per second per user. Moreover, the company's first-quarter results have demonstrated a significant 64% quarter-over-quarter growth in its networking segment, backed by both scale-up and scale-out products. This growth has, in turn, led to the company's remarkable 86.17% year-over-year revenue growth and 70.11% gross profit margin. A close-up of a colorful high-end graphics card being plugged in to a gaming computer. The company's NVLink solutions have grossed over $1 billion in sales. Meanwhile, its Spectrum-X (Ethernet) portfolio has achieved two new customers, contributing to a quarterly run-rate of $2 billion. Even though Infiniband is the gold standard for hyperscalers, Ethernet is also becoming a preferred choice due to its familiarity. Discussing the NVLink, analysts noted that this specialized scale-up platform connects 72 GPUs and benefits larger language models. Customers can purchase only the components they need for their AI infrastructure, such as super NICS and switches, without having to purchase the entire stack. Noting Co-Packaged Optics (CPO) in relation to NVLink, the analysts said that while copper is low power and cost-effective, it can create noise on the PCB. Placing optics next to ASICs will help the company to eliminate the need for additional digital signal processors and retimers, optimizing its AI networking solutions even further. NVIDIA specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
