Nvidia Pushes Beyond GPUs as AI Platform Expansion Targets the Full Data Center Stack

Nvidia Wants a Larger Share of the AI Factory

Nvidia (NVDA) is broadening its role in artificial intelligence from supplying GPUs toward providing more of the architecture surrounding AI computing. Recent moves include a $3.5 billion investment in MediaTek, infrastructure partnerships and advanced talks to acquire AI development platform Hugging Face for roughly $14 billion.

The strategy follows another quarter of rapid growth. Nvidia reported fiscal Q2 revenue of $96.2 billion and adjusted EPS of $2.22, both above Wall Street expectations. Data Center revenue reached $89 billion, while management provided a rare longer-term outlook calling for approximately 70% revenue growth in fiscal 2028.

Key Points

• Nvidia reported fiscal Q2 revenue of $96.2 billion and adjusted EPS of $2.22, while Data Center revenue reached $89 billion as AI computing demand remained above available supply.
• Management expects roughly 70% revenue growth in fiscal 2028, above cited Wall Street forecasts, while memory shortages continue to constrain the amount of demand Nvidia can fulfill.
• Nvidia is expanding beyond GPUs through NVLink Fusion, a $3.5 billion MediaTek investment, AI infrastructure financing and reported talks to acquire Hugging Face for approximately $14 billion.

Nvidia Expands Its AI Opportunity Beyond the GPU

Nvidia’s latest strategy centers on capturing more of the spending required to build what CEO Jensen Huang calls an “AI factory.”

The company estimates that its revenue opportunity per gigawatt of data-center power capacity has increased substantially with each generation of its technology. The figure was approximately $18 billion with Hopper, $25 billion with Grace Blackwell and $40 billion with Vera Rubin.

That increase reflects more than higher GPU sales. Vera Rubin combines Nvidia’s CPUs and GPUs with networking, memory and other infrastructure, allowing the company to sell more of the systems surrounding the core accelerator.

Custom chips add another dimension. Nvidia launched NVLink Fusion in May 2025, allowing customers to connect custom silicon to Nvidia’s broader architecture. The company then invested $3.5 billion in MediaTek, whose customers can develop custom AI chips and integrate them into Nvidia-based data-center systems.

That approach could allow Nvidia to participate in AI infrastructure spending even when another company supplies the primary accelerator.

The company is also helping expand computing capacity. Nvidia has joined an effort involving major financial institutions to mobilize more than $500 billion for AI infrastructure. Separately, Anthropic committed $35 billion to rent Nvidia-powered computing capacity from specialized cloud provider Lambda.

Nvidia’s strategy is therefore increasingly tied to the broader infrastructure required to turn computing capacity into AI output rather than GPU sales alone.

Why Is NVDA Stock Rising?

NVDA shares were up more than 4% Wednesday as investors considered both the company’s longer-term growth outlook and its continued expansion across the AI ecosystem.

Nvidia’s fiscal second-quarter results provided the financial backdrop. Revenue reached $96.2 billion, more than doubling from the prior year, while adjusted EPS of $2.22 exceeded the $2.09 Wall Street estimate.

Data Center revenue reached approximately $89 billion, compared with expectations of $85.8 billion. Edge Computing, which includes businesses such as physical AI and gaming, generated $7.2 billion, above the $6.6 billion analyst estimate.

For fiscal Q3, Nvidia expects revenue between $105.8 billion and $110.1 billion, compared with a cited Wall Street forecast of $105.1 billion. The quarter would represent Nvidia’s first above $100 billion in revenue.

Management also took the unusual step of providing a longer-term fiscal 2028 growth outlook. Nvidia expects approximately 70% revenue growth, compared with the 45% analyst forecast cited when the guidance was issued. More recent analyst estimates cited in the supplied material show Wall Street modeling approximately 63% growth, still below Nvidia’s outlook.

JPMorgan analyst Harlan Sur said Nvidia executives explained that the longer-term guidance partly reflected a meaningful gap between Wall Street estimates and the company’s internal view, which could have created supply-chain planning problems for partners.

Huang also said revenue growth could exceed 100% without memory constraints, emphasizing that underlying demand is higher than the company’s current ability to supply it.

Could Hugging Face Extend Nvidia’s Reach Into AI Software?

Nvidia is also in advanced talks to acquire privately held Hugging Face, according to reports included in the supplied material. A transaction could value the AI platform at approximately $12.9 billion, with another roughly $1 billion potentially allocated to employee retention.

No final agreement has been reached.

Hugging Face operates a widely used platform where developers share and deploy AI models. Nvidia is already a minority investor in the company and makes its Nemotron open models available through the platform.

An acquisition would move Nvidia further beyond hardware and into the developer and software ecosystem surrounding AI. UBS analyst Timothy Arcuri described the reported transaction as further evidence that Nvidia is building an end-to-end AI platform spanning developers, data, models and deployment.

The potential transaction also comes as major Nvidia customers increasingly develop custom chips and their own AI infrastructure.

Nvidia’s strategy already addresses that shift through NVLink Fusion, which can connect third-party custom accelerators to Nvidia’s architecture. A larger software and developer presence would expand that approach further into the tools and platforms used to build and deploy AI applications.

The reported acquisition nevertheless remains uncertain. Nvidia and Hugging Face had not confirmed a transaction, and the supplied reports said an agreement could come as soon as this week but had not yet been finalized.

What It Means for Investors

The latest NVDA stock news highlights two related parts of Nvidia’s AI strategy.

The first is continued rapid growth in its existing business. Fiscal Q2 revenue more than doubled, Data Center revenue reached $89 billion, Q3 revenue guidance exceeded $100 billion at the midpoint, and management expects approximately 70% revenue growth in fiscal 2028.

The second is an effort to capture a larger portion of AI infrastructure spending beyond the GPU itself. Nvidia is adding CPUs, networking and other systems around its accelerators, connecting custom chips through NVLink Fusion, investing in companies involved in the AI buildout and helping expand the financing available for new computing capacity.

The increase in Nvidia’s estimated revenue opportunity from $18 billion per gigawatt with Hopper to $40 billion with Vera Rubin illustrates that strategy in financial terms. More of the infrastructure surrounding each unit of AI computing capacity is becoming part of Nvidia’s addressable opportunity.

Supply remains an important constraint. Nvidia has described demand as exceeding available capacity and expects supply limitations to continue, with memory availability specifically restricting growth.

The reported Hugging Face talks add another element to watch. If completed, the transaction would extend Nvidia further into the developer and model ecosystem, but no final agreement has been announced.

Conclusion

Nvidia’s latest moves show a company increasingly focused on the architecture surrounding AI computing rather than the GPU alone.

The financial foundation remains its rapidly expanding Data Center business. Fiscal Q2 revenue reached $96.2 billion, Data Center revenue totaled $89 billion, and management expects fiscal Q3 revenue to surpass $100 billion while projecting approximately 70% growth for fiscal 2028.

At the same time, Nvidia is expanding through NVLink Fusion, infrastructure financing, investments such as its $3.5 billion commitment to MediaTek and reported negotiations to acquire Hugging Face.

The common thread is a broader role in the AI factory. As custom chips, cloud capacity and AI software expand, Nvidia is positioning more of the surrounding computing architecture within its own ecosystem.

FAQs

Why is NVDA stock rising?

NVDA stock rose more than 4% as investors considered Nvidia’s strong fiscal Q2 results, its approximately 70% fiscal 2028 revenue growth outlook and continued expansion across AI infrastructure and software.

How much revenue did Nvidia generate in fiscal Q2?

Nvidia reported fiscal second-quarter revenue of $96.2 billion and adjusted earnings of $2.22 per share. Data Center revenue reached approximately $89 billion.

What is Nvidia forecasting for fiscal 2028?

Nvidia expects approximately 70% revenue growth in fiscal 2028. The company said underlying demand is even higher, with memory supply constraints limiting the amount of demand it can fulfill.

Why did Nvidia invest $3.5 billion in MediaTek?

Nvidia’s MediaTek investment supports a strategy that allows customers to build custom AI chips while connecting those chips to Nvidia’s broader data-center architecture through technologies including NVLink Fusion.

Is Nvidia acquiring Hugging Face?

Nvidia is reportedly in advanced talks to acquire Hugging Face for approximately $12.9 billion, with another roughly $1 billion potentially allocated to employee retention. The supplied reports state that no final agreement has been reached.

This article was created with AI assistance and reviewed by an editor. For details, please refer to our Terms of Use.

Go Beyond the Market Brief with Market Edge

Follow SharperTrades’ complete approach to trading and investing, combining active trade opportunities through Block Orders, long-term research through Stock Investor, and structured market education through the Swing Trading Masterclass. Try Market Edge for $19 your first month →

Explore Research with Stock Investor

Stock Investor is SharperTrades’ platform for long-term investing research and portfolio management. Members receive research reports, portfolio updates, conviction tracking, and in-depth analysis designed to support disciplined investment decisions.

Explore Active Trading & Income Strategies

Block Orders tracks institutional activity and highlights active trade setups and price behavior across long and short opportunities.

For options-focused traders, Essential Option Income provides a structured approach to options income strategies, while Pro Option Trader offers a broader range of options strategies and trade opportunities.

Think More Clearly with SteadyCapital

SteadyCapital is SharperTrades’ decision-support system for long-term investors, built around the SteadyCapital Method™. Review investment ideas, challenge assumptions, evaluate valuation and risk, compare companies, and think through important buy, hold, add, trim, or sell decisions before you act.

Risk Disclosure

All content is provided for educational purposes only and does not constitute investment advice. Trading involves risk, and past performance is not indicative of future results. Please review our full Risk Disclosure for additional information.