Nvidia's 90% of Customers Now Buy Networking Products, Revenue Up 162%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 16 2026
0mins
Should l Buy NVDA?
Source: Yahoo Finance
- Surging Demand for Networking: Nvidia reported $8.2 billion in networking revenue for Q3 FY2026, marking a 162% year-over-year increase, indicating strong growth potential in the AI data center networking market.
- High Customer Attach Rate: CFO Colette Kress disclosed that nearly 90% of customers purchasing AI systems also buy networking products, which not only boosts overall sales but also enhances customer loyalty.
- Steady Market Share Growth: Nvidia now holds an 11.6% share of the data center Ethernet switch market, with revenues for ultra-fast 800GbE switches nearly doubling, demonstrating its strengthened market position despite competition.
- Future Growth Potential: Market research forecasts the AI networking market to grow from $14.9 billion in 2025 to $46.8 billion by 2029, representing a 33.8% CAGR, providing Nvidia with a new growth engine even as its GPU market share may erode.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
Current: 171.880
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Future Growth Expectations: Despite facing debt pressures, Oracle's forward price-to-earnings ratio stands at just 19.8, indicating that its stock is at a two-year low, and analysts expect significant revenue growth in the future, potentially providing a good buying opportunity for investors.
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- Market Recovery: Despite a pullback in tech stocks since October, Nvidia's price is poised for significant growth in the coming years, particularly as the AI computing market continues to expand.
- Rising Capital Expenditure: AI hyperscalers have announced record capital expenditure plans for 2026, with global data center spending projected to reach $3 trillion to $4 trillion annually, positioning Nvidia as a key beneficiary.
- Strong Revenue Outlook: Analysts forecast a 52% revenue increase for Nvidia in fiscal 2027, indicating robust performance in the AI sector and sustained market demand, despite a slight slowdown in growth rate.
See More
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- Surge in Capital Expenditure: Microsoft invested $88.2 billion in AI in 2025 and is on track to exceed that in 2026, indicating strong commitment to AI demand, which will further drive Nvidia's GPU requirements.
- Strong Cloud Demand: Google anticipates capital expenditures of $180 billion in 2026, primarily for servers and data centers, underscoring sustained demand for AI solutions, positioning Nvidia as a key beneficiary.
- Solid Market Share: Nvidia holds a commanding 92% share of the data center GPU market, with its four largest customers (Microsoft, Meta, Amazon, and Google) accounting for 40% of its sales, highlighting the company's robust competitive edge in AI.
- Optimistic Earnings Outlook: Nvidia expects a 65% year-over-year revenue growth for Q4 of fiscal 2026, up from 62% in Q3, and if actual results exceed expectations, it will further boost investor confidence and drive stock price appreciation.
See More
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- Oracle's Market Challenges: Oracle, with a market cap of $440 billion, has seen its stock drop over 52% since last September, primarily due to high spending on AI infrastructure and a debt load exceeding $100 billion.
- Financial Performance Highlights: Oracle's recent Q2 FY2026 earnings report revealed a 14% year-over-year revenue increase to $16.05 billion, with net income soaring 95% to $6.13 billion, although this includes a $2.7 billion pre-tax gain from the sale of Ampere Computing.
- Future Growth Potential: Oracle's cloud revenue reached $7.977 billion, a 34% increase year-over-year, and future revenue is expected to rise significantly, with a forward price-to-earnings ratio of 19.8, indicating the stock's attractiveness.
See More
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- Surging Market Demand: The demand for memory due to artificial intelligence is projected to lead data centers to consume 70% of all memory chips in 2026, creating a critical shortage that presents significant market opportunities for Micron Technology.
- Factory Construction Plans: Micron is building a gigantic factory near Syracuse, New York, to meet the growing market needs, marking a strategic shift as it exits the consumer PC memory market.
- Strong Financial Performance: In fiscal year 2025, Micron achieved $37.4 billion in revenue, a 49% year-over-year increase, and recorded $13.6 billion in revenue for Q1 fiscal 2026, up 57% year-over-year, indicating robust growth momentum.
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See More
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- Growth Expectations: Analysts forecast a 52% revenue increase for Nvidia in fiscal 2027, slightly down from 63% in fiscal 2026, demonstrating the company's continued strong performance in the AI computing market.
- Capital Expenditure Trends: Global data center capex is projected to reach $3 trillion to $4 trillion annually by 2030, positioning Nvidia as a key beneficiary of this spending, thus maintaining its multi-year growth trajectory.
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See More
