Nvidia’s fortunes may be shifting as hyperscalers reassess their spending on artificial intelligence (AI) computing power. The recent DeepSeek news has raised questions about whether efficiency will become the next wave of AI dominance.
Despite its strong track record, Nvidia’s stock has been on a rollercoaster ride following the news, with investors scrambling to understand its impact. One investor, Bluesea Research, is predicting a correction in the near term due to the market finding a balance between computing power and efficiency.
Bluesea cites evidence that hyperscalers are focusing on building better AI efficiencies, with Amazon and Microsoft already offering DeepSeek models to their customers. This shift could hurt Nvidia’s demand for its latest chips and lead to margin pressure.
Additionally, Bluesea warns about unique chips developed by Google, Amazon, and Microsoft, which could reduce their dependence on Nvidia’s GPUs. Given that hyperscalers account for 40% of Nvidia’s revenue, this dual threat poses a significant risk to the company’s profitability.
Analysts are divided, with some predicting a Sell rating (Bluesea Research) versus others giving NVDA a Strong Buy consensus, pegging its 12-month price target at $178.71 – implying a ~38% upside from current levels. As always, investors should do their own analysis before making any investment decisions.
Source: https://www.tipranks.com/news/dont-pull-the-trigger-says-investor-about-nvidia-stock