Celestica and NVIDIA gain top ranking in Ethernet data center switch market
As data center providers enhance their facilities to keep pace with new AI demands, it is driving new sales of Ethernet data center switches, a trend that was evident in the first quarter.
Led by Celestica and NVIDIA, Ethernet Data Center Switch sales surged over 40 percent in the first quarter of 2025, marking the strongest growth since the market began being separately tracked in 2013 and surpassing what Dell’Oro Group describes as a new all-time high.
“AI investments continue to accelerate at an unprecedented level, even amid tariff disruptions—propelling a surge in spending on the compute as well on the networking infrastructure that goes with it,” said Sameh Boujelbene, Vice President at Dell’Oro Group.
Vendor market gains
Celestica and NVIDIA saw the most significant gains, each expanding their revenue share by more than five percentage points. The two companies are now among the top five vendors in the market.
Celestica reported in its first-quarter earnings report that it saw gains in two key segments-- communications and hyperscalers, with communications revenues up 87% to $1.42 billion.
The company noted healthy demand for 400G programs and multiple ramping 800G programs with major hyperscaler customers. Furthermore, Celestica’s Hyperscaler Portfolio Growth is driven by networking demand from 800G ramp-ups through 2025, supported by ramp-ups in AI/ML compute in the second half of 2025.
Likewise, NVIDIA saw gains during the fiscal first quarter 2026 with revenue rising 12% to $44.1 billion. NVIDIA also saw data center revenue jump 10% sequentially to $39.1 billion.
Also, Arista continues to lead the market for the fourth consecutive quarter. Amidst the fluid tariff situation, Arista surpassed $2 billion in revenue for the first time in the first quarter of 2025.
Ethernet challenges InfiniBand
One of the notable developments during the first quarter reporting season for data center switches was the continued challenge from Ethernet to InfiniBand.
A significant contribution to growth during the first quarter was the introduction of 800 Gbps switches.
Dell’Oro said 800G switch sales surpassed $1 billion during the quarter. The rise of generative AI has primarily driven the adoption of 800 G Ethernet (GbE).
“Just two years ago, over 80 percent of AI clusters ran on InfiniBand, but Ethernet is striking back rapidly—gaining significant ground as reflected by the astonishing surge in Ethernet Data Center Switch sales during the quarter,” Boujelbene said.
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Sean Buckley
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