Ethernet switch revenue rose 43.4 percent year on year to $18.91 billion in Q2 2026, an all-time record, according to IDC data. Sequential growth was 23.1 percent. The router market, long squeezed as routing functions move into Ethernet switch ASICs, grew 22.8 percent to $4.51 billion in the same period.

The boom has one clear engine: generative AI systems in the datacenter. But record demand is colliding with component shortages, and vendors are making up the shortfall through price increases rather than volume alone.

Who is winning the switch market?

Cisco remains the largest Ethernet switch vendor by revenue, with sales up 36.2 percent to $5.43 billion in Q2 2026. Nvidia, however, grew 2.8 times year on year to $3.86 billion, driven by its attach rate for Spectrum-X switches that scale out DGX server nodes and NVL72 rack-scale systems.

The rest of the leaderboard shifted as well:

• Arista Networks grew 37.6 percent to $2.53 billion
• Huawei came in at $1.55 billion, up 28.6 percent
• Hewlett Packard Enterprise grew only 6.1 percent to $1.15 billion, even after absorbing Juniper Networks
• ODM collective sales reached an estimated $3.56 billion, up 2.43 times year on year (an analyst estimate, not an IDC figure)

IDC no longer publishes ODM revenue, so that number is an augmentation of the official data. The takeaway: Nvidia is converting its AI system franchise into a top-tier networking business at a pace no incumbent can match.

What is happening inside the datacenter?

Datacenter Ethernet switch revenue reached $12.3 billion in Q2 2026, up 64.5 percent year on year and 23 percent sequentially. That segment made up 65.1 percent of all switch revenue. An estimated 129.5 million ports shipped into datacenters, about 42.8 percent of total ports.

The speed mix is shifting fast. All 800 Gb/sec switch sales went to datacenter customers, and revenue at that speed rose 6.1 times year on year to $5.07 billion, a 41.5 percent sequential jump. IDC data indicates that 800 Gb/sec ports climbed from 35.9 percent of all datacenter switch ports in Q1 2026 to 41.2 percent in Q2. Estimated shipments at that speed went from 35.3 million ports in Q1 to 54.3 million in Q2.

Sales of 200 Gb/sec and 400 Gb/sec switches, almost entirely datacenter products, rose 71.6 percent to $6.35 billion, on an estimated 35.8 million ports. In short, the market is moving up the speed curve faster than most roadmaps anticipated.

Is the record growth sustainable?

Growth faces two constraints. Component shortages are capping how fast vendors can ship, even as hyperscalers and cloud builders negotiate hard for volume discounts on 800 Gb/sec ports. Price per port has fallen slightly, but not by much, because the number of ports per box keeps rising as 51.2 Tb/sec and 102.4 Tb/sec switching ASICs reach the market.

Vendors are also watching the next transition. 1.6 Tb/sec switches will ramp in volume for high-end GenAI systems before long, and low-latency Ethernet using UALink or ESUN protocols may emerge as an alternative to Nvidia's NVLink/NVSwitch pairing. That shift would reshape who sells the scale-up fabric inside AI clusters.

What does this mean for buyers?

The vendor hierarchy inside the datacenter is tightening. Nvidia nearly tripled its datacenter Ethernet sales, while HPE managed a 2.1-times increase to just $345 million, less than one-tenth of Nvidia's total. Arista stayed marginally ahead of Cisco, growing 37.9 percent to $2.3 billion, against Cisco's 77.3 percent growth to $2.24 billion. The Cisco figure excludes revenue from selling its Silicon One ASICs to hyperscalers and cloud builders, whose ODMs assemble homegrown switches.

There is also a structural imbalance worth flagging. In Q2 2026, an estimated 6.2 times more server cores were sold than switch ports above 10 Gb/sec. Compute is outrunning networking across the industry, which may partly explain persistently low server utilization. Firms that fix that ratio will buy a large share of the next wave of switch capacity.