Nvidia Lines Up a Big AI Catalyst… Just Days Before Earnings Drop

Nvidia is about to drop another earnings report, and, surprise, surprise, analysts expect it to be yet another barnburner. Most suits expect $38 billion in revenue (a 72% jump from last year) and $21.1 billion in profit. (Yes, that’s profit… just for the quarter.) The company’s stock has exploded 478% in the last two years, at times even claiming the title of most valuable U.S. company… a crown it wore for all of five minutes before the market knocked it back down.

But Huang & Co. aren’t relying on eye-popping financials to keep the stock an exciting buy... Nvidia is also expanding its partnership with Cisco to make AI adoption easier for businesses that aren’t sitting on unlimited budgets like Microsoft, Google, and Amazon. (Basically, if you’re a mid-sized company that wants to brag about “leveraging AI” in earnings calls but can’t afford a server farm the size of Montana, Nvidia and Cisco want your business.)

For years, AI infrastructure has been an exclusive club… membership requirements: billions of dollars in GPUs and an engineering team that could probably build a rocket ship in their spare time. Hyperscalers like Microsoft and Google have led the charge, renting out compute power to everyone else. But now, Nvidia and Cisco are looking to bring AI to a broader audience by integrating Cisco’s networking chips into Nvidia’s Spectrum-X Ethernet platform. The goal is to make it easier (and slightly less financially painful) for companies to deploy AI without needing a degree in data center architecture.

(Source: Nvidia)

Cisco CEO Chuck Robbins framed the partnership as a response to businesses facing “pressure” to integrate AI quickly but struggling with “costs and risks.” The Nvidia-Cisco package is supposed to make AI adoption as plug-and-play as possible… at least, in theory.

The timing of this partnership isn’t random. Nvidia’s biggest customers (the cloud companies) have been sending mixed signals on AI spending. Microsoft, which is expected to account for 35% of all spending on Nvidia’s Blackwell AI chips in 2025, was rumored to be rethinking its data center investments. Microsoft later reassured everyone that it’s still planning to spend $80 billion on infrastructure next year.

On the other hand, Google is projected to account for 32.2% of Blackwell chip spending, followed by Oracle (7.4%) and Amazon (6.2%). In other words, Nvidia is deeply dependent on a handful of massive customers… so if any of them start cutting back, Nvidia’s growth will get stunted.

And in regards to the DeepSeek fears that will forever linger… Huang, of course, isn’t worried. His latest defense is that AI will always demand more computational power, not less. Nvidia is now pushing something called “Test Time Scaling”, which is an argument that AI models can keep improving as long as you throw more GPUs at them. (A very convenient position when you happen to sell the most in-demand GPUs on the planet.)

Even with these concerns, Wall Street still loves Nvidia. The consensus price target is $175 per share, implying a 34% upside from here. Analysts believe Nvidia’s dominance in AI hardware (plus its growing footprint in AI networking and self-driving tech) will keep the company in a league of its own.

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Stock.News has positions in Microsoft, Amazon, and Alphabet.