Nvidia is shifting manufacturing capability to maximise its information middle merchandise.
Nvidia is resuming gross sales to China.
Rubin structure will drive a large spending spree amongst its shoppers.
Nvidia (NASDAQ: NVDA) has been a fully unimaginable performer over the previous three years. Its inventory outperformed the market in 2023, 2024, and 2025, however can it do it in 2026? I feel this subsequent part of synthetic intelligence could possibly be even larger for Nvidia.
How is that potential? Let’s discover out.
When reviewing Nvidia’s Q3 outcomes, CEO Jensen Huang famous that Nvidia was “bought out” of cloud graphics processing items (GPUs). That is merely unimaginable, particularly contemplating that Nvidia generated $57 billion in complete income. Information middle GPUs made up nearly all of that complete, with $51.2 billion in gross sales coming from that division.
The information middle division additionally encompasses different non-GPU merchandise Nvidia makes to help its ecosystem. Nevertheless, it is nonetheless spectacular to promote out of a product when gross sales are already that prime. To fulfill the unprecedented demand, Nvidia is trying to develop manufacturing capability in any approach potential. Whereas it is pushing its suppliers upstream to supply extra chips and different {hardware}, it is also making capability adjustments on different product traces.
One space the place Nvidia is making some arduous decisions is that it is reportedly slicing manufacturing capability for its gaming chips. Gaming generated $4.3 billion in income throughout Q3 for Nvidia, so it is not insignificant to Nvidia’s enterprise, but it surely might unlock some chip capability to construct extra worthwhile and in-demand information middle GPUs.
Mixed with the elevated provide chain, these two components will improve Nvidia’s manufacturing capability to satisfy buyer demand. Nevertheless, assembly all of their demand will not be potential as a result of sheer quantity required by its shoppers.
So, subsequent time you hear about an AI hyperscaler launching its personal chip or signing a cope with a competitor, like Advaced Micro Gadgets, buyers should not assume that Nvidia’s product is inferior. It could possibly be that Nvidia does not have the capability that they want, so they’re turning to various sources.
This bodes effectively for Nvidia’s future and can permit it to manage the margins and pricing on its merchandise if provide constraints persist. Nevertheless, two different components might present Nvidia with a big progress enhance in 2026.
In April 2025, Nvidia’s export license to ship H20 chips (which have been particularly created to abide by U.S. export legal guidelines to China) was revoked. This brought about an enormous dent in Nvidia’s enterprise, though the corporate stored rising quickly. For Q2, Nvidia anticipated about $8 billion in income from H20 gross sales. That income might return shortly, but it surely has a catch.
