DeepSeek's New AI Model May Conceal Chip Source
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NVDA?
Source: stocktwits
- Model Release Strategy: DeepSeek plans to launch its new AI model around the Lunar New Year but has withheld access from Nvidia and AMD, instead granting several weeks of tuning time to domestic suppliers like Huawei, potentially impacting the market position of U.S. chipmakers.
- Intent to Conceal Technology: Reports suggest that DeepSeek may seek to remove technical indicators revealing its use of American AI chips and plans to publicly claim that its model was trained using Huawei chips, which could attract scrutiny from U.S. regulators.
- Training Hardware Context: DeepSeek's new model is reportedly trained on Nvidia's top-tier Blackwell chip using a cluster located in mainland China, which may violate U.S. export regulations, further escalating tensions in the U.S.-China tech rivalry.
- Market Reaction Analysis: While DeepSeek's strategy may pose challenges for Nvidia, the latter reported strong performance in its latest earnings, with fourth-quarter revenue reaching $68.1 billion, a 73% year-over-year increase, demonstrating its robust competitive position in the market.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 192.850
Low
200.00
Averages
264.97
High
352.00
Current: 192.850
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
See More
Analysts Claim Nvidia is Massively Undervalued
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
See More
Nvidia Approaches Partnership Deal with OpenAI
- Partnership Progress: Nvidia CEO Jensen Huang stated that the company is nearing a partnership agreement with OpenAI, indicating a strong collaborative relationship that is expected to further solidify Nvidia's leadership in the AI market.
- Surging Demand: Huang noted that with the arrival of the ChatGPT era, demand for AI technology is skyrocketing, presenting Nvidia with significant growth opportunities that could substantially enhance the company's revenue and market share.
- Technology Licensing Agreement: Nvidia recently entered into a non-exclusive licensing agreement with xAI's Grok for its low-latency inference technology, a move that will bolster Nvidia's technological edge in AI applications and lay the groundwork for future product innovations.
- Future Outlook: Huang revealed that more details regarding the collaboration with xAI will be shared at the Nvidia GTC in March 2026, demonstrating the company's commitment to future technological developments and transparency with investors.
See More
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- Revenue Beat: Nvidia reported Q4 fiscal 2026 revenue of $68.1 billion, surpassing analysts' expectations of $66.2 billion, reflecting a robust 73% year-over-year growth that underscores the company's strong momentum in the AI sector.
- Strong Earnings: The company posted adjusted earnings per share (EPS) of $1.62, exceeding the anticipated $1.54, which highlights its improving profitability and reinforces investor confidence in its financial health.
- Significant Free Cash Flow Growth: Nvidia's free cash flow for Q4 reached $34.9 billion, a remarkable 125% increase from $15.5 billion last year, providing substantial financial resources for future investments and expansion.
- Optimistic Outlook: The company forecasts Q1 fiscal 2027 revenue of $78 billion, which, if achieved, would represent a 77% year-over-year increase, indicating Nvidia's strong potential for sustained business growth moving forward.
See More
Nvidia's Earnings Exceed Expectations Amid Surging AI Demand
- Impressive Earnings: Nvidia reported record revenue of $68 billion for Q4 FY2026, reflecting a 73% year-over-year increase and a 20% quarter-over-quarter rise, easily surpassing analyst expectations of $66.2 billion, showcasing the company's robust performance in the AI sector.
- Strong Data Center Performance: The data center segment generated $62.3 billion in revenue, soaring 75% year-over-year and 22% sequentially, further solidifying Nvidia's leadership in high-performance computing and cloud markets, indicating sustained demand for AI technologies.
- Gaming Segment Recovery: While gaming revenue reached $3.7 billion, up 47% year-over-year, it remains dwarfed by the data center segment, with the CFO indicating potential supply constraints in the coming quarters, highlighting a strategic shift in the company's focus.
- Optimistic Future Outlook: Nvidia forecasts Q1 FY2027 revenue of $78 billion, representing a 77% year-over-year growth, with gross margins expected to remain at 74.9%, reflecting strong confidence in the AI market and significant future growth potential.
See More
AI Inference Market Poised for Significant Growth
- Market Growth Potential: The AI inference market is projected to grow from approximately $106 billion to nearly $255 billion by 2030, indicating a robust growth trend that is attracting significant attention and investment from various companies.
- Nvidia's Technological Edge: Nvidia is enhancing its inference capabilities by acquiring Groq's employees and technology, planning to integrate new language processing units (LPUs) into its CUDA software platform, thereby solidifying its leadership position in the inference market.
- AMD's Market Opportunity: With Nvidia's competitive moat in inference being less pronounced, AMD has the chance to expand its market share through OpenAI's investment and commitment to using 6 gigawatts of its GPUs, which is expected to drive significant revenue growth for the company.
- Broadcom's ASIC Advantage: As a leader in ASIC technology, Broadcom is helping customers turn chip designs into physical chips, and is poised to benefit from the rapid growth of the inference market, particularly through collaborations with Alphabet and OpenAI, enhancing its market position.
See More
