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Despite a side that has taken$ 500 billion from its market cap, the average Nvidia ( ) analyst’s price target, among 63 who cover it, is$ 174, about 45 % above where the stock trades today. Wall St. has not given up on the catalysts of the huge march that has increased the price by 900 % in five years.
The grounds for the enthusiasm are a little convoluted. China’s new DeepSeek AI software, which costs about$ 7 million to produce, is less expensive than the$ 100 million that OpenAI’s comparable product would cost. Nevertheless, it appears that the Chinese may have made false claims. DeepSeek’s authors could had gotten a large number of Nvidia’s most prominent chips from Singapore. Donald Trump’s candidate for Commerce Secretary, Howard Lutnik, commented” They bought a huge number of Nvidia cards, found a way to get around the regulations, and now they are using them in their” DeepSeek AI design. ” If so, Nvidia’s powerful chip franchise may be protected.
Another argument is that the tens of billions of dollars pumped in AI server farms by tech companies which include OpenAI, Microsoft ( ), Meta Platforms ( ), and a group put together by the White House made the right decision. However, this idea does become hard to prove. Nvidia said that DeepSeek’s progress will mean that the AI world’s growth is exploding, and that the need for its cards will continue to wave as well. If that is not real, the nation’s largest tech firms and” smartest “financiers have made horrible miscalculations.
When Nvidia releases its profitability and forward guidance, evidence that which theory is true may be forthcoming as soon as it is confirmed. The discussion revenue forecast for the upcoming third is$ 38.3 billion, away 73 % from the same quarter the year before. DeepSeek may not be able to change this number, but any indication that the year’s revenue will be” sweet” will cause the stock to take a nosedive.
Most Nvidia experts are going to either seem like magicians, or idiots.
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