Nvidia Bulls Cheer Despite AI Cost Concerns
Nvidia (NVDA) bulls remain optimistic ahead of the chipmaker's earnings report next week, despite concerns over AI costs raised by DeepSeek.
Analysts remain upbeat on Nvidia, citing long-term growth prospects in accelerated computing and generative AI. Loop Capital's Ananda Baruah maintains a $175 price target, highlighting the company's potential to capture a significant portion of the growing compute market.
However, cautions have been raised regarding the first quarter outlook. BofA's Vivek Arya anticipates headwinds from the Blackwell chip transition, Hopper declines, and China restrictions.
Despite the mixed sentiment, Wall Street continues to support Nvidia in the short term. The company's leading product pipeline and market expansion initiatives are expected to drive positive momentum post-earnings.
In the premarket trading, Nvidia stock rose slightly, currently hovering around $140.
While Nvidia shares have rebounded from recent lows, analysts remain divided on the company's fundamentals. Evercore's Mark Lipacis highlights concerns over DeepSeek's impact on AI demand, compute cycles, and Blackwell chip delays.
DeepSeek's cost-effective AI model has sparked fears of overspending on AI infrastructure, including Nvidia chips. However, experts like Snowflake's Sridhar Ramaswamy believe that DeepSeek has disrupted traditional assumptions about AI training costs.
Despite these concerns, investors are eagerly anticipating Nvidia's earnings report on February 26, with analysts expecting a modest beat in Q4. The Street's cautious optimism reflects the company's long-term growth potential in the evolving AI and computing landscape.