Nvidia’s earnings week frenzy has passed, leaving investors to reassess their stance on the company. With margins below expected levels due to Blackwell AI chip ramp-up, some analysts believe this could be a buying opportunity. However, others see it as a sign of deeper sell-off.
The key takeaway is that Nvidia’s business remains strong and likely to stay strong. Fourth quarter revenue rose 12% sequentially and 78% from the prior year, with data center sales more than doubling. Earnings also beat analyst estimates.
Nvidia founder and CEO Jensen Huang emphasized demand for its Blackwell systems, stating customers are anxious and impatient to get these systems. While guidance for 2025 remains unchanged, some analysts question whether AMD’s market share or Amazon’s custom chips will impact Nvidia’s position.
Two areas warrant closer attention: DeepSeek’s R1 requiring more compute resources and the upcoming GTC event on March 17. If these new chips deliver as promised, they could further reinforce Nvidia’s leading position in AI infrastructure.
Ultimately, a deeper understanding of nation-states’ buildout of AI infrastructure is needed to gauge demand for Nvidia chips. However, it’s essential to remember that what was reported from the earnings call was likely already factored into investor expectations.
As a seasoned stock analyst, I believe the sell-off could be an overreaction, given the strong fundamentals and the potential upside of these new products.
Source: https://finance.yahoo.com/news/the-dust-settles-on-nvidia-morning-brief-110036550.html