Will NVDA's Blackwell Platform Support Its Data Center Revenue Growth?

NVIDIA Corporation’s NVDA Blackwell platform is becoming a key driver of its Data Center revenue growth. In the third quarter of fiscal 2026, the Data Center segment generated $51.22 billion in revenues, representing 89.8% of total sales. This marked a staggering 66% year-over-year increase and 25% sequential growth.

The ongoing ramp-up of the Blackwell architecture is central to NVIDIA’s Data Center business growth. 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 artificial intelligence (AI) workloads, from large language models to real-time inference. NVIDIA’s full-stack approach, which combines graphics processing units (GPUs), networking and software, continues to make it the preferred partner for large-scale AI projects.

The near-term outlook still appears solid, with the company expecting further strength from Blackwell shipments and expanding orders across cloud, sovereign AI and enterprise AI projects. NVIDIA also sees the growing adoption of agentic AI, long-context workloads and advanced inference systems, all of which depend on high-performance GPU clusters, as key catalysts for long-term growth.

The growing demand for the company’s AI chips used in data centers is likely to continue aiding its Data Center business performance. Our model estimate for fiscal 2026 Data Center revenues is currently pegged at $190 billion, indicating a year-over-year increase of 65%.

NVIDIA’s Competitors in the AI Data Center Space

Advanced 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 Gaudi3 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 Estimates

Shares of NVIDIA have risen around 19.3% over the past six months compared with the Zacks Semiconductor – General industry’s gain of 17.6%.

NVIDIA 6-Month Price Return Performance

From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 26.8, lower than the industry’s average of 28.97.

NVIDIA Forward 12-Month P/E Ratio

The Zacks Consensus Estimate for NVIDIA’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 55.9% and 55.2%, respectively. Estimates for fiscal 2026 have been revised upward by 4 cents to $4.66 per share in the past 30 days. Earnings estimates for fiscal 2027 have been revised upward by a penny to $7.24 per share in the past seven days.

NVIDIA currently carries a Zacks Rank #2 (Buy). 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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