With Nvidia showing that demand for its GPUs and associated products isn’t slowing down but is instead ramping up and boosting profits, the AI infrastructure giant claimed it’s the ‘world’s largest networking business’ after the segment reached $31 billion in annual revenue.
Nvidia said Wednesday that it saw the largest sequential growth in company history for the fourth quarter as it claimed to be the “world’s largest networking business.”
The AI infrastructure giant’s fourth-quarter revenue hit a record $68.1 billion, up 20 percent from the previous quarter and up 73 from a year ago. This was roughly $2 billion higher than the average estimate by Wall Street analysts, allowing Nvidia to finish its 2026 fiscal year, which ended in late January, with $215.9 billion in revenue.
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With Nvidia showing that demand for its GPUs and associated products isn’t slowing down but is instead ramping up and boosting profits, the Santa Clara, Calif.-based company’s stock price was up slightly in after-hours trading.
Since the company’s last earnings report in November, the tech industry has become increasingly ensnared by a global memory shortage fueled by the ongoing AI data center buildout that has made Nvidia the world’s most valuable company.
The AI-driven supply constraints, which have caused a sharp rise in DRAM and NAND chip costs, have hit the channel hard, with solution providers, including Nvidia partners, facing escalating hardware prices, intermittent product availability, shifting ordering policies and shortened price quote windows from OEMs, including HPE, Lenovo and Cisco.
Nvidia said its gross margin in the fourth quarter was 75.2 percent, up 1.7 points year over year, while net income was $39.5 billion, up 25 percent sequentially and up 79 percent year over year. Earnings per share were $1.62, up 25 percent sequentially, up 82 percent year over year and well above the average analyst estimate.
In the current quarter, which ends in late April, the company expects revenue to reach $78 billion, plus or minus 2 percent. At the midpoint, this would represent a 14.5 percent sequential increase and a 76 percent year-over-year increase. Nvidia is also forecasting gross margins to be roughly 75 percent for the first quarter.
Within Nvidia’s lucrative data center business, revenue in the fourth quarter reached a record $62.3 billion, which represented 91 percent of the company’s total revenue for the period. This was up 22 percent sequentially and up 75 percent from a year ago, with hyperscalers driving more than 50 percent of revenue.
It was also 13 times higher since when OpenAI debuted ChatGPT in 2021, Nvidia CFO Colette Kress said on the company’s earnings call.
The data center business was mainly driven by compute sales, which includes GPUs and associated platforms, representing $51.3 billion or 82 percent of the segment. This was up 19 percent sequentially and up 58 percent from year ago.
But Nvidia’s data center segment also got a significant boost from its networking business, which recorded a record $11 billion, up 34 percent sequentially and up 263 percent year over year. The company said this was driven by a “continued ramp” of its NVLink compute fabric for its Grace Blackwell GB200 and GB300 rack-scale platforms as well as growth of its Spectrum-X Ethernet and Quantum InfiniBand networking platforms.
This record for the segment allowed the company to close the 2026 fiscal year with $31 billion in networking revenue, “up more than 10 times” compared to the fiscal 2021 year that Nvidia acquired Mellanox Technologies, according to Kress.
Nvidia’s claim about being the “world’s largest networking business” appeared in a presentation for its fourth-quarter earnings, which Nvidia CEO Jensen Huang echoed on the call.
“I think that we’re probably the largest Ethernet networking company in the world today—and surely will be soon. And so Spectrum-X Ethernet has been a home run for us, but we’re open to however people want to do networking,” he said.
Elsewhere across the company’s business, gaming revenue grew 47 percent year over year but fell 13 percent sequentially to $3.7 billion. Professional visualization revenue increased 74 percent sequentially and 159 percent year over year to $1.3 billion. Automotive revenue was $604 million, up 2 percent sequentially and up 6 percent year over year.
