Nvidia’s data center business is booming as tech giants ramp up AI spending
Data center revenue for Nvidia’s fiscal first quarter is expected show an 87% increase from a year earlier to $73.1 billion, representing even faster expansion than the 75% year-over-year jump in the prior quarter and 73% growth rate in the same period a year ago.
The persistent growth reflects the exploding capital expenditures from hyperscalers, which are snapping up GPUs for their data center computing infrastructure that underpins their AI initiatives.
On the same day last month, Alphabet, Amazon, Meta and Microsoft all reported quarterly results, giving investors an updated glimpse into their capex forecasts for the year. Financial firms like Evercore and Bank of America are projecting the group will spend over $1 trillion on AI-related capex in 2027, which ultimately benefits Nvidia.
John Belton, portfolio manager at Gabelli Funds, said in an email on Tuesday that he’s “looking for whether the company is broadening its customer base as that remains a major risk,” adding that five names account for roughly half of Nvidia’s business.
“I’m questioning things such as how durable the growth within that segment of the business is as well as if they’re expanding the customer base and broadening the product set,” Belton said.
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