Nvidia’s recent stock sell-off, triggered by concerns over Chinese startup DeepSeek’s AI breakthrough, may be a buying opportunity for investors ahead of the chipmaker’s earnings report later this month. According to Evercore ISI analysts, the negative sentiment is largely driven by fears about DeepSeek’s impact on overall AI demand and potential shifts in AI compute cycles from Nvidia’s GPUs to ASICs.
However, Evercore notes that while DeepSeek offers cost improvements, these are seen as incremental rather than revolutionary. The investment bank believes Nvidia will remain the preferred platform for AI due to its robust software ecosystem and community support, placing it years ahead of competitors like AMD and AWS.
Evercore expects increased demand for AI tokens, which is expected to drive more accurate models and faster development of multi-mode models that train on various data types. The analysts also point out that innovations like LiquidAI, which train models during the inference process, underscore the need for programmable platforms like Nvidia’s GPUs.
The consensus on Blackwell delays suggests that the ramp-up has been pushed to mid-2025 from the first half of 2025, and demand for Nvidia’s GPUs remains high. In the absence of Blackwell’s B100, customers are expected to purchase the current H100 model instead.
Nvidia’s stock is currently trading at a next twelve months price-to-earnings ratio of 29x, which is in the lower half of its 8-year range of 20x-65x and below the 8-year median of 36x. The analysts expect Nvidia’s earnings report on February 25th to provide clarity on the company’s position in the market.
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Source: https://www.investing.com/news/stock-market-news/evercore-sees-a-buying-opportunity-in-nvidia-stock-after-deepseek-selloff-3859023