Key Points
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Data centers now drive over 90% of Nvidia’s revenue.
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Nvidia sells a complete AI platform, it sells GPUs, networking, systems, and software.
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Custom AI chips, slower AI spending, and regulation could challenge Nvidia’s growth but this ticker is set to run into next year.
- 10 stocks we like better than Nvidia ›
Tech stocks, AI stocks, semiconductor stocks, it seems like everyone is trying to catch the next Nvidia (NASDAQ: NVDA). When people look around for the best semiconductor stock to buy right now, I don’t go to any flashy new names; I still go straight back to good ol’ Nvidia. I’ve watched chips and cycles come and go, and no other name sits as close to the center of the AI world as Nvidia does today.
In the first quarter of fiscal 2027 (ending April 26, 2026), Nvidia reported revenue of $81.6 billion, with data center sales of $75.2 billion, up 93% year over year and now more than 90% of the company’s total revenue. That data center number matters more than any gaming rebound or auto contract because it shows where the company now lives. Every time Microsoft, Meta Platforms, Amazon, or Alphabet expands its AI clusters, it spends large sums on Nvidia systems. When sovereign funds and start-ups talk about AI factories, they are mostly talking about racks full of Nvidia hardware and software.
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The hardware itself has moved past single chips. Blackwell GPUs pack around 208 billion transistors and use a custom chip process. Two dies are tied together via a 10-terabyte-per-second link, so they behave like one large device. Those GPUs then slot into systems like GB200 and GB300 that connect Grace CPUs, Blackwell accelerators and Spectrum networking into unified AI racks. On top of that stack, you find CUDA, Nvidia AI Enterprise, and an ecosystem of tools for training, fine-tuning, and inference. All this sounds heavy, but in other words, Nvidia does not sell just chips alone. It sells an AI factory-in-a-box.
Why Nvidia heading into 2027?
What keeps me in the stock heading into 2027 is how demand and pricing look together. AI factory compute has become an investable asset class in its own right. Nvidia has partnered with BlackRock, Blackstone, Goldman Sachs, and others to help mobilize more than $500 billion in third-party capital to finance AI infrastructure, with Nvidia designing and supplying the platforms.
Rental pricing for H100s and B200s tells the same story. One year, H100 rates climbed from about $1.70 per GPU-hour in October 2025 to roughly $2.35 per GPU-hour in March 2026, with on-demand cloud prices near $2.70 per GPU-hour by June. Blackwell rates run higher still in a band from about $5.30 to $7.05. Those numbers show that Nvidia has not had to discount its way through this boom.
The mental side of Nvidia
There is also a psychological side that investors rarely admit but that matters. Nvidia has become the default AI ticker. When a retail trader wants exposure to AI, the first search box entry is Nvidia. When a pension fund wants a core AI position without building a basket of small names, Nvidia is the simple answer. Analysts cover the company closely, and price targets for the next year still point to gains from current levels on top of an already large move. Popularity can cut both ways in corrections, yet it also means Nvidia has steady access to capital and close scrutiny, which tends to keep execution sharp.
None of this means Nvidia is risk-free. Custom ASICs will chip away at some workloads. AI capex cycles can slow if macro conditions shift or if major customers pause spending. Regulators around the world are paying closer attention to concentration in compute supply. Those concerns matter. When I weigh them against the current setup, though, I still see Nvidia as the best way to own the AI infrastructure theme through 2027. Data center revenue growth, full-stack systems, strong pricing, and deep mindshare all point in the same direction.
Should you buy stock in Nvidia right now?
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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, BlackRock, Blackstone, Goldman Sachs Group, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
