By Daniel Howley
Publication Date: 2026-02-26 18:40:00
Nvidia (NVDA) reported blowout results after the bell on Wednesday, beating analysts’ fourth quarter expectations on the top and bottom lines and issuing better-than-anticipated guidance for Q1.
Wall Street wasn’t exactly excited about the announcement — Nvidia stock fell more than 4% in early trading Thursday — but that could be tied to anxiety related to the broader AI trade.
Regardless, Nvidia’s data center business drove the vast majority of its $68.1 billion in revenue, accounting for $62.3 billion in sales. Dig deeper into the details, though, and there’s another nugget worth exploring: Nvidia’s networking business.
While the bulk of data center revenue came from GPU and CPU sales, which Nvidia refers to as its compute segment, $11 billion came from the company’s networking group, up 263% year over year.
Nvidia’s networking business has become an unsung hero within its data center business over the years. And despite its relatively small size compared to the company’s computer arm, it’s gaining more attention.
“We’re … now the largest networking company in the world,” CEO Jensen Huang said during Nvidia’s earnings call.
The AI giant’s networking business can be broken down into three main categories: scale-up, scale-out, and scale-across.
Scale-up has to do with connecting multiple server blades within a large server rack. Scale-out connects multiple server racks and systems into a large cluster, allowing companies to run a data…
