Nvidia has made a significant impact in the Ethernet market, positioning itself as a major player, according to analysts at Rosenblatt. Despite Arista’s statement during its fiscal Q1 2024 earnings call that it does not see Nvidia as a direct Ethernet competitor, Rosenblatt analysts believe otherwise. They argue that Nvidia has established itself as a significant Ethernet player with the introduction of Spectrum X Ethernet Networking in 1Q25.
The Spectrum-X solution is tailored for AI applications, much like Infiniband, aiming to integrate the network into the AI compute fabric efficiently. This innovative approach sets Nvidia apart from traditional Ethernet players like ANET and Cisco, providing performance and competitive advantages. Analysts noted that Nvidia’s Spectrum-X platform is gaining momentum, with several customers, including a 100,000 GPU cluster.
Rosenblatt predicts that the Spectrum-X platform will evolve into a multibillion-dollar product line within a year, showcasing Nvidia’s steady growth in the Ethernet market. While ANET may currently downplay Nvidia’s competitive threat, Rosenblatt suggests that Nvidia has its sights set on challenging established players like ANET in the near future.
With Nvidia’s rapid expansion in the AI sector, analysts anticipate that the company could dominate the Ethernet market, possibly surpassing ANET within the next two to three years. They argue that ANET should be valued based on historical metrics rather than AI-related multiples, given Nvidia’s escalating presence in the Ethernet space.
As Nvidia continues to strengthen its position in the networking sector, the competition among industry players is likely to intensify. The dynamics of the Ethernet market are evolving, with Nvidia emerging as a key player to watch in the coming years.
