NVIDIA Corporation (NVDA) Surges Ahead With $2B Ethernet Push and $1B NVLink Wins

We recently published a list of 10 AI Stocks on Wall Street’s Radar. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other AI stocks on Wall Street’s radar.

On June 3^rd, Citi analyst Atif Malik reiterated a Buy rating on NVIDIA Corporation (NASDAQ:NVDA) with a $180.00 price target.

The analysts have pointed out Nvidia’s strategic focus on artificial intelligence (AI) networking, highlighting the company’s efforts to optimize compute and storage with its networking operating system, Dynamo. Dynamo is intended to achieve the lowest total cost of ownership for tokens per second per user.

Moreover, the company’s first-quarter results have demonstrated a significant 64% quarter-over-quarter growth in its networking segment, backed by both scale-up and scale-out products. This growth has, in turn, led to the company’s remarkable 86.17% year-over-year revenue growth and 70.11% gross profit margin.

The company’s NVLink solutions have grossed over $1 billion in sales. Meanwhile, its Spectrum-X (Ethernet) portfolio has achieved two new customers, contributing to a quarterly run-rate of $2 billion. Even though Infiniband is the gold standard for hyperscalers, Ethernet is also becoming a preferred choice due to its familiarity.

Discussing the NVLink, analysts noted that this specialized scale-up platform connects 72 GPUs and benefits larger language models. Customers can purchase only the components they need for their AI infrastructure, such as super NICS and switches, without having to purchase the entire stack.

Noting Co-Packaged Optics (CPO) in relation to NVLink, the analysts said that while copper is low power and cost-effective, it can create noise on the PCB. Placing optics next to ASICs will help the company to eliminate the need for additional digital signal processors and retimers, optimizing its AI networking solutions even further.

NVIDIA specializes in AI-driven solutions, offering platforms for data centers, self-driving cars, robotics, and cloud services.

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Disclosure: None. This article is originally published at Insider Monkey.