Nvidia‘s (NASDAQ: NVDA) data center business grew at an eye-popping pace in the previous fiscal year. The company dominates the market for artificial intelligence (AI) graphics cards, which are being deployed in huge numbers by major cloud computing and AI companies.
Data center revenue jumped a whopping 217% in fiscal 2024 (ended Jan. 28, 2024) to $47.5 billion. If you’re wondering how much room Nvidia’s data center business has to run going forward, analyst Vijay Rakesh of Japanese investment bank Mizuho recently explained why he believes this segment’s red-hot growth is far from over.
Nvidia’s data center revenue could multiply from here
According to Mizuho, Nvidia’s data center revenue in the current fiscal year could jump 87% to about $89 billion. More importantly, Rakesh predicts Nvidia’s data center revenue could jump to $280 billion by 2027 (which will coincide with the bulk of the company’s fiscal 2028).
That suggests Nvidia’s data center revenue could increase at an annual rate of 56% over the next four years, and there is a good chance it could indeed hit that mark.
This impressive growth will be driven by the ramp-up of Nvidia’s new chips. The company is set to launch the H200, B100, and B200 AI chips in 2024 and 2025. Customers are already lined up to get their hands on these processors.
The H200, for instance, will be available from the current quarter. Companies like Amazon, Microsoft, Google, and Oracle are expected to launch cloud instances powered by these chips this year, according to Nvidia. Meanwhile, these cloud computing providers have also expressed interest in Nvidia’s next-generation Blackwell AI processors, which the company claims are set to deliver huge performance and efficiency upgrades over the Hopper architecture it launched a couple years ago.
The Blackwell products should be available “starting later this year,” and the company claims “Amazon Web Services, Dell Technologies, Google, Meta, Microsoft, OpenAI, Oracle, Tesla and xAI” are among the many companies expected to adopt this platform. That wouldn’t be surprising as Nvidia is…
..