Yahoo Finance reports that Nvidia’s ‘most underappreciated’ business is taking off like a ‘rocket ship’. As Nvidia prepares to report Q2 earnings on August 27, investor focus will be on its Data Center segment, particularly the often-overlooked networking division. While chip sales drive most revenue, Nvidia’s networking technologies, NVLink, InfiniBand, and Ethernet, are critical to AI infrastructure, enabling high-speed communication between GPUs and servers. In Q1, networking brought in $4.9 billion, outpacing its entire Gaming segment. With the rising demand for large-scale AI and inferencing, networking is becoming an essential growth engine. Despite growing competition from AMD and cloud providers, Nvidia remains the leader in both AI chips and supporting infrastructure. They write:
When Nvidia (NVDA) reports its second quarter earnings on Aug. 27, investors will focus squarely on the company’s data center results. After all, that’s where the chip giant realizes revenue on the sale of its high-powered AI processors.
But the Data Center segment includes more than just chip sales. It also accounts for some of Nvidia’s most important, though often overlooked, offerings: its networking technologies.
Composed of its NVLink, InfiniBand, and Ethernet solutions, Nvidia’s networking products are what allow its chips to communicate with each other, let servers talk to each other inside massive data centers, and ultimately ensure end users can connect to it all to run AI applications.
“The most important part in building a supercomputer is the infrastructure. […]
“It is the most underappreciated part of Nvidia’s business, by orders of magnitude,” Deepwater Asset Management managing partner Gene Munster told Yahoo Finance. “Basically, networking doesn’t get the attention because it’s 11% of revenue. But it’s growing like a rocket ship.” […]
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