NVIDIA dropped nearly 5% today despite posting the largest earnings beat in semiconductor history. The “sell the news” crowd won this round. But while everyone obsesses over whether to buy or sell NVDA, the smarter play might be hiding one layer deeper.
Evercore ISI published a note breaking down NVIDIA’s Q4 results and identifying the derivative beneficiaries — the companies that win when NVIDIA’s numbers are this good, regardless of what NVDA stock does on any given day. And the list reads like a shopping list for the next leg of the AI infrastructure buildout.
First, the sovereign AI story. NVIDIA’s sovereign business — selling AI infrastructure to foreign governments — tripled year-over-year. That’s massive. And it flows directly to Dell (DELL), Hewlett Packard Enterprise (HPE), and Cisco (CSCO), which serve as the original equipment manufacturers assembling and delivering these systems. When governments start buying AI hardware at scale, they don’t call NVIDIA — they call Dell and HPE.
Second, network spending is exploding. AI data centers don’t just need GPUs — they need the networking backbone to connect them. Evercore flagged Arista Networks (ANET) and Ciena (CIEN) as primary beneficiaries, with Cisco getting a double-dip from both sovereign sales and networking demand. Arista in particular has been quietly building the high-speed switching fabric that makes AI clusters actually work.
Third — and this is the one most investors are sleeping on — NVIDIA disclosed that GPUs across three different generations remain fully utilized. Not the latest Blackwell chips. All three generations. That’s a bullish signal for GPU cloud providers like CoreWeave (CRWV), which rents out GPU compute time. If utilization is running at full capacity across every generation, it means AI demand isn’t slowing — it’s saturating. CoreWeave’s entire business model just got validated.
Finally, NVIDIA’s purchase commitments jumped by more than $30 billion compared to last year. That money flows to data center infrastructure plays like Amphenol Corporation (APH) and Vertiv (VRT) — the companies building the power delivery, cooling systems, and physical connectors that make AI data centers function. These aren’t glamorous stocks. They’re plumbing. And plumbing is where the reliable money gets made.
The pattern here is familiar. When a gold rush happens, the pick-and-shovel sellers get rich while the miners go bust. NVIDIA is the mother lode, but Dell, Arista, CoreWeave, and Amphenol are selling the shovels. If you’re looking for AI exposure without the NVDA valuation anxiety, this is where the smart money is looking right now.