Back in 2020, Nvidia dropped $6.9 billion on a company most people had never heard of, Mellanox, an Israeli outfit that made networking switches and adapters.
At the time, it barely registered. Jensen Huang was buying GPUs, building the chip story, and a networking company felt like a rounding error next to that. Six years on, the rounding error just beat Cisco.
Nvidia (NVDA) passed Cisco in data center Ethernet switching revenue for the first quarter of 2026, the first time that’s happened. Not a small corner of Cisco’s business either; it’s the category Cisco basically built. Seeking Alpha reported the figures, pulled from IDC’s latest tracker.
Nvidia’s switching revenue grew 192.7% year over year to $2.1 billion, good for a 21.5% share of a data center segment that itself grew 61% to $10 billion. The wider Ethernet switch market, campus networks included, hit $15.4 billion, up almost 40%.
Why everyone’s suddenly fighting over switches
The driver behind all of it is simple enough. Training an AI model means thousands of GPUs constantly talking to each other, and somebody has to wire that conversation. A year ago Nvidia was bringing in roughly $1.46 billion a quarter from data center Ethernet switching. The quarter after, $2.3 billion. This climb didn’t happen overnight, it’s been building for two years, and Q1 2026 is just when it finally crossed the finish line ahead of Cisco and Arista Networks, the two names that have owned this market for ages.
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TechCrunch traced the whole thing back to that Mellanox deal. Kevin Deierling, who runs networking at Nvidia and joined through the acquisition, said the bet looked strange even to him at the time.
“When Jensen bought Mellanox in 2020, he saw that was the missing piece to make GPUs a complete package,” Kevin Cook, a senior equity strategist at Zacks Investment Research, told TechCrunch, describing how the deal is now viewed inside the industry.
The product most people outside networking have never heard of
What’s actually doing the work is something called Spectrum-X. Training clusters need to move enormous amounts of data between thousands of GPUs without delay, and regular Ethernet was never built for that kind of pressure. The old fix was InfiniBand, faster, but pricier and locked tightly into Nvidia’s own world already.
Spectrum-X splits the difference.
Nvidia pairs its switches with BlueField processing units and custom cabling to get close enough to InfiniBand speeds that customers stop worrying about the gap. Cheaper than InfiniBand, familiar enough that IT teams aren’t relearning everything from scratch, fast enough to actually run AI workloads at scale.
Customers, including Microsoft Azure, Oracle Cloud, CoreWeave, Google Cloud, and Meta, have adopted the platform, Benzinga reported, citing Nvidia CFO Colette Kress.
The driver behind all of it is simple enough. Training an AI model means thousands of GPUs constantly talking to each other, and somebody has to wire that conversationSullivan/Getty Images
Switching is only half the story, maybe less
Here’s where it gets bigger.
Switching is one slice of what Nvidia now calls its networking division, alongside NVLink and InfiniBand. Combined, that division pulled in $11 billion in revenue last fiscal quarter, up 263% year over year. Full year total came to $31 billion, up more than tenfold from fiscal 2021.
Those numbers are why Jensen Huang made a claim during Nvidia’s earnings call that would’ve gotten laughed at a few years back.
“We’re now the largest networking company in the world,” Nvidia’s CEO said, Yahoo Finance reported.
Cisco’s most recent quarterly networking revenue came in well below that single quarter. Cook summed up the comparison for TechCrunch this way: Nvidia’s networking arm “does in one quarter what Cisco’s business does in a year.”
You’d expect that to dominate every earnings call. It doesn’t.
Blackwell GPU sales soak up the spotlight, and even gaming, Nvidia’s original business and now a third the size of networking, still pulls more headlines. The networking business just keeps compounding quietly while everyone watches the chip numbers.
What it means if you hold Cisco, Arista, or Nvidia stock
Cisco spent thirty years owning this exact market. Arista did the same more recently and has actually held up reasonably well, leaning hard into its own AI networking pitch instead of folding.
But neither company makes GPUs, and that’s the structural problem nobody’s solving with a faster switch. The deals Nvidia is winning aren’t decided on switch specs alone. They’re decided because Nvidia can sell the chip and the network that connects it as a single bundle, and Cisco and Arista simply can’t match that without a GPU business of their own.
For Nvidia shareholders, the GPU pitch has been told so many times it barely registers anymore.
Networking is the more interesting thread now, mostly because every dollar earned there used to belong to somebody else.
Add sovereign AI revenue and core compute into the picture, and Nvidia isn’t riding one growth wave anymore. It’s riding three, which makes any single slowdown a lot easier to absorb than it would’ve been a few years ago.
None of this means Cisco or Arista are going away. Both still serve enterprise customers who aren’t building AI clusters, the day-to-day campus and branch networking that has nothing to do with GPUs, and that market grew a respectable 12.3% in the same quarter.
But the part of the business that’s growing fastest, the part everyone wants to talk about on earnings calls, is the one Nvidia just took the top spot in. That’s the part that matters most for where these stocks go from here.
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Back in 2020, Nvidia dropped $6.9 billion on a company most people had never heard of, Mellanox, an Israeli outfit that made networking switches and adapters. At the time, it barely registered. Jensen Huang was buying GPUs, building the chip…
