NVIDIA Leads in Data Center GPU Market: Will Blackwell Keep It Ahead?

NVIDIA Corporation NVDA continues to dominate the data center market, driven by its latest Blackwell graphics processing unit (GPU) architecture. In the first quarter of fiscal 2026, the company generated $39.1 billion in revenues from the data center market, representing a 73% year-over-year increase. On the last-quarter earnings call, NVDA stated that Blackwell now contributes nearly 70% of the data center segment’s compute revenues, with demand led by artificial intelligence (AI) factories and the rise of advanced reasoning models.

NVIDIA’s Blackwell platform, particularly the GB200, is built for large-scale AI inference. On the last earnings call, management stated that major cloud players are rapidly deploying Blackwell GPUs, nearly 72,000 GPUs per week by each hyperscaler. With stronger manufacturing yields and expanded availability, Blackwell has become NVIDIA’s fastest product ramp in history.

NVIDIA is also preparing to ship its next-gen GB300 during the calendar third quarter of 2025. With increased high-bandwidth memory and an efficient drop-in design, the GB300 chip promises a 50% performance boost over GB200. Early sampling has already begun at major cloud service providers.

It’s not only hardware that has contributed to Blackwell’s success. NVIDIA's software ecosystem, including CUDA, NeMo and its inference microservices, allows developers to fully utilize Blackwell’s potential. This deep integration makes switching away from NVIDIA harder for customers.

As the AI wave grows and more companies build AI factories globally, NVIDIA’s lead could strengthen. If Blackwell maintains its current pace and NVIDIA continues to support it with a strong ecosystem, the company’s leadership in data centers is likely to continue. Our model estimates indicate that the company’s revenues from the data center end-market will witness a CAGR of 30.3% through fiscal 2025 to fiscal 2028.

NVIDIA Rivals AMD and Intel Up Their Game in AI Data Centers

NVIDIA’s major competitors, Advanced Micro Devices AMD and Intel INTC, are also stepping up their capabilities in the data center AI chip market.

Advanced Micro Devices’ MI300X GPUs are gaining attention for their high memory and power efficiency. Several hyperscalers are testing AMD’s solutions as alternatives to NVIDIA’s Blackwell, especially in cost-sensitive or specialized workloads. Advanced Micro Devices is also building a strong software stack to grab more customers.

Intel is focusing on both CPUs and AI accelerators to grab a market share in the data center space. The company is promoting its Gaudi 3 AI chips as a low-cost option for training and inference. Intel is also working with major cloud providers to expand the adoption of its AI hardware.

NVIDIA’s Price Performance, Valuation and Estimates

Shares of NVIDIA have risen around 31.6% year to date against the Zacks Computer and Technology sector’s gain of 10.9%.

From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 35.84, higher than the sector’s average of 27.86.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 42.5% and 32.2%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.

NVIDIA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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