NVIDIA's Data Center Dominance: AI-Driven Growth and Strategic Partnerships Fuel Long-Term Value

The global shift to AI has transformed data centers into battlegrounds for computational supremacy, and NVIDIA stands at the epicenter. With its cutting-edge GPUs, next-gen infrastructure partnerships, and a revenue model primed for sustained growth, the company is poised to capitalize on the AI revolution. This article dissects NVIDIA's strategic moves, GPU demand trends, and revenue dynamics—arguing that now is the time to position for long-term gains ahead of key earnings catalysts.

1. The Infrastructure Revolution: 800V HVDC and Strategic Partnerships

NVIDIA's transition to 800-volt high-voltage direct current (HVDC) data centers marks a paradigm shift. Traditional 54V DC systems are inefficient for AI's power-hungry workloads, but the new architecture promises:
- 5% efficiency gains and 30% lower total cost of ownership (TCO) through streamlined power distribution.
- 70% reduced maintenance costs and minimal cooling needs, driven by partnerships with Navitas Semiconductor and Vertiv.

Navitas, a leader in gallium nitride (GaN) semiconductors, is critical for converting 13.8kV AC to 800V DC—a process that slashes copper demand and centralizes power management. NVIDIA's collaboration has propelled Navitas' sales to $83.3M in 2024, with stock surging over 100% in 2025. Meanwhile, Vertiv is building the industrial backbone, delivering rectifiers and DC converters by late 2026 to align with NVIDIA's 2027 rollout of its Kyber and Rubin Ultra platforms.

These partnerships aren't just about hardware—they're about owning the future of data center design. Analysts project Vertiv's mid-teens revenue growth through 2027 as demand for HVDC infrastructure surges.

2. GPU Demand: A Growth Engine Fueled by AI and HPC

The data center GPUs market is booming, growing at a 21.63% CAGR to hit $22.46B by 2034. NVIDIA's Vera Rubin and Blackwell Ultra architectures are at the core of this trend:
- Vera Rubin SuperChips deliver 50 PFLOPS FP4 compute, enabling exascale AI factories with 15 exaflops inference per rack.
- Blackwell Ultra GPUs feature FP6 precision and 288GB HBM4 memory, supporting trillion-parameter models like OpenAI's GPT-4.

The NVLink Fusion interconnect, announced at Computex 2025, opens NVIDIA's ecosystem to third-party CPUs and accelerators, broadening its reach beyond traditional cloud providers. This shift is key to global expansion—especially in Taiwan, where NVIDIA is partnering with Foxconn to build AI supercomputers and establish a new headquarters.

3. Revenue Recognition: A Steady Flow of Earnings

While NVIDIA's Form 10-Q doesn't explicitly detail multi-year contracts, the financials tell a story. Under ASC 606, revenue from long-term agreements is recognized over time, smoothing out earnings and reducing volatility.

• Multi-Year Cloud Agreements: NVIDIA's “MultiYearCloudServiceAgreementsMember” indicates recurring revenue streams from hyperscalers and enterprises. These contracts likely span 3–5 years, ensuring steady cash flow as infrastructure investments pay off.
• Deferred Revenue: The $30.0B revenue in Q2 2024 (vs. $13.5B in Q2 2023) suggests strong upfront bookings. However, the full value of multi-year deals will be recognized gradually, creating a “tailwind” for future quarters.

This model is ideal for investors seeking stable, long-term growth. While competitors like AMD and Intel scramble to catch up, NVIDIA's full-stack dominance—from chips to software—keeps switching costs prohibitively high.

4. Investment Thesis: Position Ahead of Catalysts

NVIDIA's roadmap is packed with catalysts that could drive valuation higher:
- 2027 HVDC Rollout: The Kyber/Rubin Ultra platforms will solidify NVIDIA's control over AI factories.
- CPO (Co-Packaged Optics) Launch: Expected in 2025, this will slash latency and costs, accelerating adoption.
- Taiwan Partnerships: Geopolitical risks are mitigated as NVIDIA diversifies manufacturing and supply chains.

Investment Advice:
- Buy-and-Hold Strategy: NVIDIA's moat in AI infrastructure and its delayed revenue model make it a 5–10-year play.
- Options for Momentum Traders: Consider call options ahead of earnings or product launches to amplify returns.
- Risk Management: Monitor geopolitical tensions (e.g., U.S.-China chip restrictions) and competition from AMD's MI300.

Conclusion

NVIDIA's dominance isn't just about selling GPUs—it's about redefining what a data center can do. With AI adoption accelerating and partnerships like Navitas/Vertiv solidifying its infrastructure lead, the company is set to generate decades of growth. For investors, the path is clear: secure positions now, and ride the AI train to exascale glory.

JR Research urges investors to consider NVIDIA as a core holding for long-term portfolios, with a price target of $700–$800 by 2027.