Investors shift from GPUs to networking chips after Nvidia's record data‑centre results

Nvidia’s May 20 earnings report did more than extend the company’s lead in artificial-intelligence chips. It also redirected investor attention toward the hardware that sits around those chips — the networking gear that links AI servers together and the power electronics that keep large clusters running. Nvidia reported record first-quarter fiscal 2027 revenue of $81.6 billion and record data-center revenue of $75.2 billion, while saying data-center networking revenue reached $14.8 billion. The move in related stocks followed quickly. Navitas Semiconductor rose 19.98% to $29.25 on May 22, according to market data cited by IBTimes Australia and Yahoo Finance, and Motley Fool highlighted Nebius as an AI infrastructure stock that has outperformed Nvidia since January. ### Why are investors looking past the GPU itself? Nvidia’s own numbers pointed to the answer. The company said on May 20 that first-quarter data-center networking revenue rose 199% from a year earlier and 35% sequentially to $14.8 billion. (nvidianews.nvidia.com) That figure suggested that spending on AI systems is extending beyond the processors at the center of the buildout. 24/7 Wall St. framed that expansion in competitive terms, saying Nvidia’s networking business was running at roughly a $60 billion annualized pace and could challenge Broadcom’s position in AI interconnects. (ibtimes.com.au) That comparison is an outside analysis, not Nvidia guidance, but it captured the market’s focus after the earnings release. ### What does networking do inside an AI data center? (finviz.com) Large AI clusters depend on high-speed links between servers, accelerators and storage systems. Nvidia’s results showed that those links are becoming a larger business in their own right as customers build bigger systems for training and inference. Odaily, summarizing the earnings, said Nvidia’s figures showed compute demand remained strong and pricing power held up. (247wallst.com) Intellectia said the same release underscored the scale of data-center demand while also highlighting how crowded the AI trade has become. Those assessments help explain why investors began looking for suppliers one layer removed from the best-known chip name. ### Why did Nebius show up in this trade? Motley Fool’s May 23 report pointed to Nebius as a direct beneficiary of AI infrastructure spending rather than a competitor to Nvidia. (nvidianews.nvidia.com) The article said Nebius had outperformed Nvidia since January and noted Nvidia’s March 2026 agreement to invest $2 billion for an approximately 8.3% stake in the company. That matters because Nebius is tied to the buildout of AI capacity, not just chip design. (odaily.news) Motley Fool said the partnership would support deployment of more than 5 gigawatts of data-center capacity by 2030. ### Why did a power-chip company like Navitas jump? Navitas makes gallium nitride and silicon carbide power semiconductors, which investors increasingly connect to the electricity demands of AI servers and high-voltage data-center designs. (fool.com) IBTimes Australia reported that the stock rose nearly 20% on May 22 as analyst price-target increases and AI infrastructure optimism added to momentum. (webull.ca) Yahoo Finance market data showed Navitas closed that day at $29.25 after trading as high as $29.50. The company’s recent appeal to investors has rested less on current profit and more on its exposure to the power side of AI infrastructure. ### Why didn’t Nvidia’s own stock get all of the benefit? Motley Fool said Nvidia beat on revenue, profit and guidance, yet the stock still fell after earnings. The article described that as the fourth straight post-earnings decline despite a beat, a sign that expectations for Nvidia itself had become harder to exceed. (ibtimes.com.au) Nvidia’s next test is already set. The company said second-quarter fiscal 2027 revenue is expected to be $91 billion, plus or minus 2%, and it said it is not assuming any China data-center compute revenue in that outlook. (finance.yahoo.com) (markets.businessinsider.com) (fool.com)