Nvidia’s networking division generated $8.2 billion in revenue during the third quarter of fiscal 2026, marking a 162% year-over-year increase. This performance was driven by strong customer adoption of NVLink, InfiniBand switches and Spectrum-X Ethernet platforms, with nearly 90% of AI system purchasers now adding networking products to their GPU orders. Industry forecasts project the AI networking market to expand from $14.9 billion in 2025 to $46.8 billion by 2029, positioning this segment as a key new growth engine for the company’s data center strategy.

Taiwan Semiconductor Manufacturing’s fourth-quarter results—$33.7 billion in sales and adjusted earnings per share of $3.14—surpassed consensus estimates, underscoring sustained demand for Nvidia’s AI chip designs. In response, Nvidia shares rose over 2% on the day of the announcement. TSMC also committed to increase capital expenditures by more than 30% to approximately $56 billion for the year, suggesting a long runway for AI chip fabrication orders and reinforcing investor confidence in Nvidia’s data center growth outlook.

Despite delivering a historic 25,300% gain over the past decade on a hypothetical $10,000 investment, Nvidia’s current market valuation—approximately 21.5 times forward sales and 40 times forward earnings—raises questions about the feasibility of similarly outsized returns. Even under optimistic assumptions of 50% annual growth, achieving the 10,000% gain needed to turn a new $10,000 stake into $1 million would require sustained acceleration well beyond consensus forecasts. Investors are weighing these valuation headwinds against ongoing AI momentum as they assess the stock’s long-term upside potential.