Nvidia, a leader in artificial intelligence (AI), saw its stock price decline by 11% in 2025 following a surprise announcement from Chinese hedge fund-owned DeepSeek regarding the resources needed to create high-performing large language models. The news overshadowed Nvidia’s strong revenue growth in its data center segment, which had been the focus of analysts’ attention.
In January 2025, DeepSeek dropped an AI bombshell claiming it created a large language model with just $6 million in capital, sparking concerns about the sustainability of Nvidia’s sales growth. However, investors are advised to wait for Nvidia’s next earnings report on February 26 to gauge the company’s response to the challenge.
Before the DeepSeek news, Nvidia’s data center revenue was experiencing an unsustainable rate of growth, which began to slow down. The company’s share price had already surged due to this sales momentum. However, if spending on generative AI infrastructure were to halt, as some experts believe may happen, Nvidia’s data center revenue growth would likely reverse.
A closer look at the quarter-over-quarter data center revenue growth reveals a decline in recent months, with a 16% decrease in Q2 2025 compared to the previous quarter. This trend will be closely watched by investors to determine if Nvidia can recoup its recent losses.
While the data center segment is crucial for Nvidia’s short-term performance, the company has other long-term growth catalysts, including its auto and robotics business. The latter segment has potential to drive significant growth and could be a key area of focus in the coming months.
Source: https://www.fool.com/investing/2025/02/04/every-nvidia-investor-should-watch-this-number