The Next Phase of the AI Boom Could Be Even Bigger for Nvidia

Core Viewpoint - Nvidia is positioned for significant growth in the upcoming years, particularly in 2026, driven by strong demand for its products and strategic adjustments in production capacity [1]. Group 1: Financial Performance - Nvidia generated a total revenue of $57 billion, with $51.2 billion coming from data center GPUs, indicating the dominance of this segment in its overall performance [3]. - The gaming division contributed $4.3 billion in revenue during Q3, highlighting its importance, although production capacity is being reduced to prioritize more profitable data center GPUs [6]. Group 2: Production Capacity and Demand - Nvidia is currently "sold out" of cloud GPUs, reflecting unprecedented demand and prompting the company to expand production capacity [3][4]. - The company is pushing suppliers to increase chip production and is making capacity adjustments across other product lines to meet demand [4][7]. Group 3: Market Opportunities - Nvidia is set to regain access to the Chinese market for its H20 chips, which could generate approximately $8 billion in revenue, albeit with a 25% fee that may affect pricing strategies [10][11]. - The upcoming launch of Nvidia's next-generation architecture, Rubin, is expected to enhance performance and drive further growth, particularly with the transition to 800-volt power systems [12]. Group 4: Industry Outlook - Global data center capital expenditures are projected to rise to $3 trillion to $4 trillion by 2030, a significant increase from around $600 billion in 2025, which could lead to substantial growth for Nvidia [13]. - The strategic moves being made by Nvidia, including returning to China and increasing production capacity, are expected to maximize sales and potentially lead to a record year in 2026 [14].