NVIDIA Dominates GPU Market, Expects $3-4T by 2030
NVIDIA, the leading graphics processing unit (GPU) manufacturer, continues to dominate the market and drive growth in artificial intelligence (AI) and data center sectors. Despite headwinds, the company maintains a strong financial performance and strategic partnerships.
NVIDIA's CEO, Jensen Huang, recently revised his forecast for the global GPU market, now expecting it to reach $3-4T by 2030. Currently, NVIDIA owns approximately 90% of this market. The company's moat lies in its computing architecture, which uses parallel processing to handle vast amounts of data simultaneously, making it crucial for AI model training and running.
In Q2 2026, NVIDIA reported $46.7B in revenue, marking a 56% year-over-year (YoY) growth and its 11th consecutive 'double beat' quarter. Data center revenue accounted for approximately 88% of the total revenue. The company's gross margins stand at 60.5%, significantly higher than peers like AMD, which had gross margins of 43% in the last quarter.
NVIDIA's strong financial performance is reflected in its free cash flow (FCF) margins, which closely track its net income margins, indicating robust profitability and cash generation. For Q3, FY26, management guided to $54B in revenue at the midpoint, representing another 15% sequential increase, even excluding contributions from China. Despite export restrictions and China-related export curbs, NVIDIA has maintained its position as a compelling long-term growth play in the tech sector at a nice valuation.
Recent partnerships, such as the one with OpenAI to deploy 10GW of GPU-powered data-center capacity, further solidify NVIDIA's central role in the AI infrastructure revolution. NVIDIA's CUDA software layer and developer ecosystem increase its advantage, as developers remain locked into the NVIDIA ecosystem once onboarded, raising switching costs.
NVIDIA's dominance in the GPU market and its strategic position in AI and data center sectors are expected to drive continued growth. Despite challenges, the company's strong financial performance, innovative architecture, and strategic partnerships position it well for future success.
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