Nvidia investors may be overlooking a small but rapidly growing part of the AI chipmaker’s business, according to one investment chief.
After Nvidia’s earnings beat failed to push the stock higher, Nancy Tengler — the CEO and CIO at Laffer Tengler Investments — highlighted sovereign AI as an area of Nvidia’s revenue that investors may be missing.
“The big takeaway from Nvidia earnings is that no one’s really talking about the growth in sovereign, which is just getting started,” Tengler said after the chipmaker released results for the fourth quarter.
Sovereign AI describes a nation or organization’s ability to develop, deploy, and govern AI. Nvidia says that sovereign AI enables “domestic AI development aligned with national priorities,” like creating economic opportunities, driving productivity, and making countries’ AI tech more competitive globally.
In the AI race era, forming AI ecosystems domestically have become a key policy priority for governments across the globe.
A McKinsey survey of executives, investors, and government officials found that 71% consider sovereign AI as an “existential concern” or “strategic imperative.”
“The next phase of the AI era may well hinge on how effectively countries, companies, and investors translate that intent into action,” the researchers wrote.
Nvidia’s sovereign AI made up $30 billion of the the chipmaker’s $215.9 billion in total sales for fiscal 2026.
During the earnings call, CFO Colette Kress told investors that customers in Canada, France, the Netherlands, Singapore, and the UK fueled the company’s sovereign AI growth. Nvidia recently announced a $1 billion sovereign AI project with India.
While the segment makes up a small portion of Nvidia’s total revenue (roughly 1% of all sales in fiscal 2026), sovereign AI revenue more than tripled year-over-year.
Tengler compared Nvidia’s sovereign AI business to Tesla’s rapidly growing Megapack battery business.
“I think we will continue to see these companies expand their reach, and more compute is going to be more demand,” she added.
Nvidia’s CFO remarks on the earnings call supported that the chipmaker is expecting to gain from ongoing sovereign AI.
“Over the long run, we expect our sovereign opportunity to grow at least in line with the AI infrastructure market, as countries spend on AI proportional to their GDP,” she said.
