Will NVIDIA's Data Center Business Unit Keep Beating Sales Records?

NVIDIA Corporation’s NVDA data center business has become the company’s main growth driver, consistently setting new sales records as demand for AI computing surges. In the second quarter of fiscal 2026, the unit reported $41.1 billion in revenues, up 56% from last year, fueled by strong demand from hyperscalers, AI model developers and enterprise customers expanding their AI infrastructure. This performance highlights NVIDIA’s dominant role in powering the global AI buildout.The ongoing ramp-up of the Blackwell architecture is central to NVIDIA’s momentum. The GB300 systems, which offer higher performance and improved energy efficiency compared to the previous Hopper generation, are now shipping in large volumes. Customers are using these systems to support complex AI workloads, from large language models to real-time inference. NVIDIA’s full-stack approach, which combines GPUs, networking and software, continues to make it the preferred partner for large-scale AI projects.Management expects data center growth to remain robust, projecting third-quarter total revenues of $54 billion. The Zacks Consensus Estimate for the data center unit is currently pegged at $48.88 billion, indicating a year-over-year increase of approximately 59%. These projections do not factor in potential sales of H20 chips to China, suggesting additional upside as the company has received export approvals for the same.NVIDIA’s technological lead, deep ecosystem and strong customer relationships suggest that its data center business could continue breaking records through 2026 and beyond. The consensus mark for the data center business unit’s fiscal 2026 revenues is pegged at $182.12 billion, indicating a year-over-year increase of 58%.NVIDIA’s Competitors in the AI Data Center SpaceAdvanced Micro Devices, Inc. AMD and Intel Corporation INTC are two major companies that are competing closely with NVIDIA in the AI data center space.Advanced Micro Devices is gaining traction with its MI300 series accelerators, which are designed to handle training and inference for large AI models. AMD’s chips have attracted interest from major cloud providers seeking diversification beyond NVIDIA’s ecosystem. While Advanced Micro Devices’ software stack is still developing, its performance and pricing advantages make it a credible alternative.Intel is also reasserting its presence with the Gaudi series of AI accelerators. The company is positioning Gaudi 3 as a cost-effective and scalable option for AI data centers, targeting enterprise clients looking for flexibility. Intel’s broad reach in CPUs and server infrastructure helps it integrate AI solutions more easily into existing systems.NVIDIA’s Price Performance, Valuation and EstimatesShares of NVIDIA have risen around 40.8% year to date compared with the Zacks Computer and Technology sector’s gain of 22.8%.NVIDIA YTD Price Return PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 33.46, higher than the sector’s average of 29.27.NVIDIA Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for NVIDIA’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 48.8% and 39.3%, respectively. Estimates for fiscal 2026 and 2027 earnings have been revised upward in the past 30 days.Image Source: Zacks Investment ResearchNVIDIA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>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 ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks