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NVDA

Nvidia's Networking Revenue Just Grew 263%. The AI Trade Is No Longer Just About GPUs.

March 26, 2026 — 08:45 am EDT

Written by

John Ballard for

The Motley Fool->

Key Points

- Nvidia's impressive growth in networking revenue illustrates the potential of AI to benefit multiple companies across the technology and industrial supply chains.

- Arista Networks achieved record revenue of $9 billion in 2025, driven by demand for its high-performance Ethernet switches.

- Vertiv Holdings supplies sophisticated power management and cooling solutions for large chip clusters.

- 10 stocks we like better than Nvidia ›

The artificial intelligence (AI) opportunity has primarily revolved around the surging demand for Nvidia's (NASDAQ: NVDA) graphics processing units (GPUs). However, AI requires more than just advanced chips to function effectively.

Nvidia's networking revenue jumped 263% year over year in the recent quarter. It's a clear signal that building AI data centers is driving enormous demand across the supply chain. Several companies, including suppliers of Ethernet switches and power management solutions, are being drawn into the AI infrastructure growth cycle.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

For investors looking to broaden their exposure across the AI supply chain, here are three top stocks to consider.

Image source: Getty Images.

Nvidia

This is where it all starts. Nvidia's stock has surged by an impressive 1,100% since 2022, coinciding with OpenAI's launch of ChatGPT. The company's GPUs played a crucial role in the rapid advancement of AI over the past few years, but Nvidia offers much more than GPUs.

Nvidia's networking revenue reached $11 billion last quarter, driven by strong demand for its NVLink, Spectrum-X Ethernet, and InfiniBand products. These are essential components for connecting thousands of GPUs to transmit massive amounts of data at lightning speed.

GPU sales are still the main revenue driver. Its data center revenue grew 75% year over year last quarter. CEO Jensen Huang sees $1 trillion in cumulative orders for its Blackwell and upcoming Rubin GPUs through 2027.

Leading AI companies are trading at modest valuations relative to their earnings growth prospects, and Nvidia is no different. Investors are skeptical of the sustainability of AI spending, yet the top AI infrastructure companies continue to see strong demand. Nvidia stock is currently trading at a remarkably low 21 times this year's earnings estimate, which could undervalue its long-term growth potential.

Arista Networks

AI demand drove Arista Networks (NYSE: ANET) to a record year in 2025. Its revenue surged 29% year over year to a record $9 billion. These results show Arista leveraging its industry-leading position to capture a share of the hundreds of billions of dollars spent on data centers each year.

Arista focuses on high-performance Ethernet switches, which are competing with Nvidia. However, Arista differentiates itself with its EOS software platform, which serves as the operating system that runs the entire network. Arista's AI networking revenue alone reached $1.5 billion in 2025, and management expects it to more than double to $3.2 billion in 2026.

Arista's 2026 guidance implies robust demand for its Etherlink products and switching systems, suggesting the Nvidia vs. Arista risk comparison might be underestimating the potential for both companies to succeed in this market. Management doesn't appear to see any pressure on demand, as it expects to add one or two large customers this year.

The key risk to watch would be cloud and enterprise spending cycles. A slowdown in data center spending would hurt both Nvidia and Arista. But analysts expect the company's earnings to grow at an annualized rate of 21% over the coming years. Assuming Arista delivers, the stock should follow earnings.

Vertiv Holdings

You can't operate thousands of GPUs in a data center without sophisticated power management and cooling solutions. This is driving tremendous growth for Vertiv Holdings (NYSE: VRT). The company reported that fourth-quarter organic orders surged 252% year over year, and its backlog doubled to $15 billion. Management is guiding organic net sales for 2026 to be approximately 28% higher than 2025.

An investment in Vertiv is a bet on physics. Greater densities of AI chips will create bottlenecks in power availability and heat generation. This is driving growing demand for Vertiv's cooling