Nvidia: DeepSeek Isn't Going To Topple The AI Gravy Train

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Nvidia: DeepSeek Isn't Going To Topple The AI Gravy Train

Seeking Alpha01-31 15:59

SummaryNvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.Looking deeper into the morass, I explain why DeepSeek isn't going to disrupt Nvidia's ...

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Ivy Chow
·01-31 16:36
Nvidia is a Cash Cow . I will buy more when it dip.
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Prashant0804
·01-31 16:30
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Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.Former Tesla  AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by hig","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NVDA":"英伟达"},"translate_title":"Nvidia：DeepSeek不会推翻人工智能肉汁列车","themeId":"5973ff5bf9e698cb0d60ee1260b255a5","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NVDA":1.1},"content_text":"SummaryNvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.Looking deeper into the morass, I explain why DeepSeek isn't going to disrupt Nvidia's proposition. Instead, there are good reasons to believe Nvidia should benefit.NVDA's valuation isn't excessive, and the market seems to have already considered high execution risks ahead.The King of AI doesn't seem perturbed with the fallout, as the leading American hyperscalers are expected to press on with their AI infra buildout.I argue why the steep selloff represents an amazing opportunity to load up more shares, as we take advantage of the confusion in the market.BING-JHEN HONGThe biggest drop in recent memory on Monday took Nvidia shareholders on a wild ride this week, as dip-buyers (retail investors?) engaged in aggressive purchases to help prop up NVDA stock on Tuesday. However, the topsy-turvy week took another turn for the worse as the stock is down more than 4% on Wednesday as I write this update, showing just how uncertain the market sentiments are for the undisputed King of AI chips. I presented why NVDA's thesis was worth considering in my last update as the Blackwell ramp looks ready to move into production.Given the deluge of Nvidia articles you might have read over the past few days, I don’t think I need to go into detail to remind you that DeepSeek caused the knee-jerk reaction in the market on Monday. Surprisingly, the previous week’s reaction was relatively “muted,” as if the market was too focused on President Trump’s inauguration and “forgot” about the threats lurking in the background as the China-based AI company impressed its US competitors with its AI chops.I’ve been following DeepSeek very closely since Christmas when the little known (then) Chinese AI startup launched its V3 AI model, that preluded the unveiling of its breathtaking R1 reasoning model that took many by surprise. While impressed, I believe the fear that led to such a massive selloff is overdone. Fortuitously, Nvidia made it clear that DeepSeek’s achievements on significantly improving the cost efficiencies of AI models should expand the need for more GPUs, spurring broader adoption of enterprise AI use cases, and expand the ecosystem of AI application companies. That seems to be the case for AI startups as VCs who were cautious about funding companies involved in LLM development are seeing more opportunities to partake in funding AI startups involved in developing applications. That’s good news, isn’t it? Enterprise's skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.Former Tesla (TSLA) AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by highlighting that “Deep Learning has a legendary ravenous appetite for compute, like no other algorithm that has ever been developed in AI.” He also reminded us that he “would never bet against compute as the upper bound for achievable intelligence in the long run.”Sure, some might contend that Karpathy could have understated the immense innovative and technical ingenuities of DeepSeek’s researchers and engineers in their ability to achieve such remarkable feats of efficiencies. However, the Jevons paradox’s jab by Microsoft CEO Satya Nadella (MSFT) is a reminder that cost efficiencies shouldn’t lead to lower AI compute consumption, but should instead drive a breakthrough in demand, particularly in enterprises that have yet to embrace AI fully or still in the experimentation phase.And who’s the main beneficiary as AI compute continues to take centerstage in the battle and race for AI supremacy? Who else other than Nvidia? Jensen Huang has built such an incredible ecosystem advantage spanning from chips, to Arm-based CPU integration (ARM), to InfiniBand and Ethernet networking bundles, allowing the company to scale quickly, while iterating to launch faster and ship faster than its rivals, while executing the extremely sticky CUDA “lock” to prevent unintentional leakages of market share to arch rivals like AMD (AMD).Consider this. Earlier today, the Q4 earnings release by EUV leader ASML (ASML) refuted the fallacy of fearful investors who “sold first and asked questions later” on Monday, as they worry about the possible ramifications from DeepSeek’s tremendous algo efficiencies. ASML drummed up its support for improved AI growth prospects, underscoring its belief that AI demand isn’t hitting a plateau yet, contrary to the misconception by some in the financial media earlier this week, as they fanned the flames of DeepSeek’s “destructive innovation” on the moat of Nvidia and the AI ecosystem in America that has been built on massive AI compute requirements.If anything, I believe it has driven OpenAI CEO Sam Altman and his American peers to rush toward AGI as quickly as possible, bolstered by the less onerous AI regulatory regime, under the guidance of White House crypto and AI czar David Sacks. If anything, America now recognizes that it needs to “wake up” from its slumber and complacency, and see this as its “Sputnik moment” to make sure it regains the bullish AI narrative in the market, and work hard to avoid losing market and mind share to DeepSeek and its Chinese peers.Furthermore, let’s not forget that Nvidia is the main technology partner of President Trump’s signature $500B Stargate project. The public private partnership involving Oracle (ORCL), OpenAI, and SoftBank is a highly ambitious attempt to drive massive AI infra investments, underpinned by Nvidia and Arm as the main chip partners.Nvidia is estimated to capture between 25% and 50% of the total spending, making Stargate an extremely lucrative venture (potentially) for Jensen Huang and his team over the next four years. While funding remains uncertain and likely to be the case in the near term, I believe we shouldn’t understate the significant growth optionality attributed to Nvidia’s principal role here. And with Masayoshi Son’s SoftBank expected to borrow against its Arm shares to finance the project, I’m pretty confident that Son will be keen to make sure Arm and Nvidia remain as the principal chip partners in the project, keeping AMD at bay. While it’s possible that OpenAI might introduce its in-house AI custom chips (possibly with Broadcom (AVGO)) as a hedge against Nvidia’s chip supply, it’s not likely to become the default mode that OpenAI will abide by, unless Nvidia’s tech ecosystem proves to be inferior when considering overall TCO.Nvidia is also expected to diversify its reliance on data centers even as it will likely remain as the company’s most pivotal growth vector in the near and medium term. As we observed at this year’s CES, Nvidia is anticipated to be a key player in the autonomous driving scene, as it’s also a key tech partner for Tesla’s autonomous driving ambitions. As Nvidia moves beyond AI applications into AI agents and subsequently, physical AI and robotics, I believe opportunities to build another highly lucrative stream of revenue from these pillars shouldn’t be underestimated.While AMD and Intel (INTC) are the undisputed leaders in the PC segment, Nvidia’s take with Project DIGITS marks it a serious foray to try and disrupt the incumbents’ hold on the non data center market. I’m not surprised that the company sees the opportunity to disrupt the PC market as ripe and opportunistic, given its lack of exposure there. Moreover, as AI PCs are expected to gain cadence, it makes absolute sense for Nvidia to “smell blood,” Hence, although the initial opportunities are limited to developers and advanced users for now, I wouldn’t be surprised to see the company make a more determined move to break into the mainstream market over the next couple of years, given the speed at which the company is iterating and improving.Nvidia estimates (TIKR)Nvidia’s growth rates are expected to slow further this year, and more so through 2026. Now, I don’t think Huang is dumb, he can also view Wall Street’s consensus and I believe management is fully aware that analysts don’t think Nvidia can continue on its monstrous and spectacular performances that the team achieved in the last two FYs after Nvidia concludes its report for the final quarter of fiscal 2025. Microsoft CFO Amy Hood (MSFT) demonstrates just how much the hyperscaler is keenly aware of what Wall Street is prognosticating, as she highlighted in her recent memo to her staff:As a reminder, our stock trades not only on our results, but on our outlook for the next quarter and beyond. Investors listen to our earnings call to gain deeper insights into these indicators. - (Article on Amy Hood’s memo to staff)Therefore, I expect Nvidia to help stoke more bullish sentiments on AI compute and provide more proof points for investors to chew on, as the company will most certainly want to regain the bullish narrative after this week’s uncertainties. Favorable commentary by Microsoft and Meta (META) in their respective earnings attempt to control the fallout from DeepSeek. Therefore, I believe they corroborate Nvidia’s optimism that the proliferation of more cost-efficient AI models should lead to a wider and deeper adoption by enterprises. Anthropic CEO Dario Amodei lent further credence to Nvidia’s proposition that the leading AI companies will need to spend even more (and not less) on AI compute to reach AGI (as quickly as possible), while “making sure” China doesn’t have access to these cutting-edge chips, as Amodei doubled down on the US in enforcing strict export controls to deny China’s access to the “millions of chips” that they need.However, we also learned that Nvidia is strongly opposed to the Biden administration's attempt to enforce such harsh controls through the AI diffusion rules that the former President sent out just days before he left office. It remains to be seen whether the surge in demand from America and its allies can withstand the impact of reducing and lowering AI adoption in affected tier-two countries that could also hurt Nvidia’s revenue base and growth profile. Moreover, the Chinese government has started antitrust probes into Nvidia, reportedly as an attempt to strike back at the US, which could also hurt Nvidia’s business. I believe we must keep watch on these developments carefully, as the Trump administration is reportedly considering widening the export controls on Nvidia’s H20 chips (that are currently legal for export to China). While the discussions are still in an early stage, it already has an impact on NVDA’s buying sentiments, suggesting rapidly evolving market conditions. Hence, it could affect a further valuation re-rating on the stock, holding back more aggressive buying in the near term.NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)NVDA undoubtedly suffered its most significant pullback since August and September last year, and marked by the “Jan lows\" as I indicated in the chart above. It’s important to note that the market isn’t dumb and likely cognizant of the risks I underscored earlier; that tremendous uncertainties relating to the Trump administration’s view on export controls and also how the proliferation of cheaper AI models could work out to lower the cost for AI application developers and spurring enterprise adoption.Interestingly, NVDA’s forward EBITDA multiple of 26.1x is still markedly lower than its ten-year average of 33.4x (based on S&P Cap IQ data). Also, its forward PEG ratio of 1.15 is almost 40% below its tech sector peers, showing that investors are still cautious on taking the AI hype too far. I believe the market is keenly aware that growth rates might be tempered through 2026, and thus we need to be careful to see how the surge in AI chips could work out based on the thesis that I’ve presented earlier. For high conviction investors who have confidence that Huang and his highly competent and innovative Nvidia team will have this all work out for us, the recent pullback that has been well-supported looks like an amazing time to buy more while the market remains pessimistic.","kind":"news","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":398489803231904,"gmtCreate":1738312573372,"gmtModify":1738312577032,"author":{"id":"3583623343213909","authorId":"3583623343213909","name":"Ivy Chow","avatar":"https://community-static.tradeup.com/news/9c670cce7e9b5a3d69c003dec76214f9","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3583623343213909","authorIdStr":"3583623343213909"},"htmlText":"Nvidia is a Cash Cow . I will buy&nbsp;more when it dip.","listText":"Nvidia is a Cash Cow . I will buy&nbsp;more when it dip.","text":"Nvidia is a Cash Cow . I will buy more when it dip.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/398489803231904","repostId":1181266567,"repostType":4,"repost":{"id":"1181266567","kind":"news","pubTimestamp":1738310377,"share":"https://ttm.financial/m/news/1181266567?lang=&edition=fundamental","pubTime":"2025-01-31 15:59","market":"us","language":"en","title":"Nvidia: DeepSeek Isn't Going To Topple The AI Gravy Train","url":"https://stock-news.laohu8.com/highlight/detail?id=1181266567","media":"Seeking Alpha","summary":"Enterprise's skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.Former Tesla  AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by hig","content":"<html><head></head><body><h2 id=\"id_932591761\">Summary</h2><ul style=\"\"><li><p>Nvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.</p></li><li><p>Looking deeper into the morass, I explain why DeepSeek isn&#39;t going to disrupt Nvidia&#39;s proposition. Instead, there are good reasons to believe Nvidia should benefit.</p></li><li><p>NVDA&#39;s valuation isn&#39;t excessive, and the market seems to have already considered high execution risks ahead.</p></li><li><p>The King of AI doesn&#39;t seem perturbed with the fallout, as the leading American hyperscalers are expected to press on with their AI infra buildout.</p></li><li><p>I argue why the steep selloff represents an amazing opportunity to load up more shares, as we take advantage of the confusion in the market.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" alt=\"BING-JHEN HONG\" title=\"BING-JHEN HONG\" tg-width=\"750\" tg-height=\"500\"/><span>BING-JHEN HONG</span></p><p>The biggest drop in recent memory on Monday took Nvidia shareholders on a wild ride this week, as dip-buyers (retail investors?) engaged in aggressive purchases to help prop up NVDA stock on Tuesday. However, the topsy-turvy week took another turn for the worse as the stock is down more than 4% on Wednesday as I write this update, showing just how uncertain the market sentiments are for the undisputed King of AI chips. I presented why NVDA&#39;s thesis was worth considering in my last update as the Blackwell ramp looks ready to move into production.</p><p>Given the deluge of Nvidia articles you might have read over the past few days, I don’t think I need to go into detail to remind you that DeepSeek caused the knee-jerk reaction in the market on Monday. Surprisingly, the previous week’s reaction was relatively “muted,” as if the market was too focused on President Trump’s inauguration and “forgot” about the threats lurking in the background as the China-based AI company impressed its US competitors with its AI chops.</p><p>I’ve been following DeepSeek very closely since Christmas when the little known (then) Chinese AI startup launched its V3 AI model, that preluded the unveiling of its breathtaking R1 reasoning model that took many by surprise. While impressed, I believe the fear that led to such a massive selloff is overdone. Fortuitously, Nvidia made it clear that DeepSeek’s achievements on significantly improving the cost efficiencies of AI models should expand the need for more GPUs, spurring broader adoption of enterprise AI use cases, and expand the ecosystem of AI application companies. That seems to be the case for AI startups as VCs who were cautious about funding companies involved in LLM development are seeing more opportunities to partake in funding AI startups involved in developing applications. That’s good news, isn’t it? Enterprise&#39;s skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.</p><p>Former Tesla (TSLA) AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by highlighting that “Deep Learning has a legendary ravenous appetite for compute, like no other algorithm that has ever been developed in AI.” He also reminded us that he “would never bet against compute as the upper bound for achievable intelligence in the long run.”</p><p>Sure, some might contend that Karpathy could have understated the immense innovative and technical ingenuities of DeepSeek’s researchers and engineers in their ability to achieve such remarkable feats of efficiencies. However, the Jevons paradox’s jab by Microsoft CEO Satya Nadella (MSFT) is a reminder that cost efficiencies shouldn’t lead to lower AI compute consumption, but should instead drive a breakthrough in demand, particularly in enterprises that have yet to embrace AI fully or still in the experimentation phase.</p><p>And who’s the main beneficiary as AI compute continues to take centerstage in the battle and race for AI supremacy? Who else other than Nvidia? Jensen Huang has built such an incredible ecosystem advantage spanning from chips, to Arm-based CPU integration (ARM), to InfiniBand and Ethernet networking bundles, allowing the company to scale quickly, while iterating to launch faster and ship faster than its rivals, while executing the extremely sticky CUDA “lock” to prevent unintentional leakages of market share to arch rivals like AMD (AMD).</p><p>Consider this. Earlier today, the Q4 earnings release by EUV leader ASML (ASML) refuted the fallacy of fearful investors who “sold first and asked questions later” on Monday, as they worry about the possible ramifications from DeepSeek’s tremendous algo efficiencies. ASML drummed up its support for improved AI growth prospects, underscoring its belief that AI demand isn’t hitting a plateau yet, contrary to the misconception by some in the financial media earlier this week, as they fanned the flames of DeepSeek’s “destructive innovation” on the moat of Nvidia and the AI ecosystem in America that has been built on massive AI compute requirements.</p><p>If anything, I believe it has driven OpenAI CEO Sam Altman and his American peers to rush toward AGI as quickly as possible, bolstered by the less onerous AI regulatory regime, under the guidance of White House crypto and AI czar David Sacks. If anything, America now recognizes that it needs to “wake up” from its slumber and complacency, and see this as its “Sputnik moment” to make sure it regains the bullish AI narrative in the market, and work hard to avoid losing market and mind share to DeepSeek and its Chinese peers.</p><p>Furthermore, let’s not forget that Nvidia is the main technology partner of President Trump’s signature $500B Stargate project. The public private partnership involving Oracle (ORCL), OpenAI, and SoftBank is a highly ambitious attempt to drive massive AI infra investments, underpinned by Nvidia and Arm as the main chip partners.</p><p>Nvidia is estimated to capture between 25% and 50% of the total spending, making Stargate an extremely lucrative venture (potentially) for Jensen Huang and his team over the next four years. While funding remains uncertain and likely to be the case in the near term, I believe we shouldn’t understate the significant growth optionality attributed to Nvidia’s principal role here. And with Masayoshi Son’s SoftBank expected to borrow against its Arm shares to finance the project, I’m pretty confident that Son will be keen to make sure Arm and Nvidia remain as the principal chip partners in the project, keeping AMD at bay. While it’s possible that OpenAI might introduce its in-house AI custom chips (possibly with Broadcom (AVGO)) as a hedge against Nvidia’s chip supply, it’s not likely to become the default mode that OpenAI will abide by, unless Nvidia’s tech ecosystem proves to be inferior when considering overall TCO.</p><p>Nvidia is also expected to diversify its reliance on data centers even as it will likely remain as the company’s most pivotal growth vector in the near and medium term. As we observed at this year’s CES, Nvidia is anticipated to be a key player in the autonomous driving scene, as it’s also a key tech partner for Tesla’s autonomous driving ambitions. As Nvidia moves beyond AI applications into AI agents and subsequently, physical AI and robotics, I believe opportunities to build another highly lucrative stream of revenue from these pillars shouldn’t be underestimated.</p><p>While AMD and Intel (INTC) are the undisputed leaders in the PC segment, Nvidia’s take with Project DIGITS marks it a serious foray to try and disrupt the incumbents’ hold on the non data center market. I’m not surprised that the company sees the opportunity to disrupt the PC market as ripe and opportunistic, given its lack of exposure there. Moreover, as AI PCs are expected to gain cadence, it makes absolute sense for Nvidia to “smell blood,” Hence, although the initial opportunities are limited to developers and advanced users for now, I wouldn’t be surprised to see the company make a more determined move to break into the mainstream market over the next couple of years, given the speed at which the company is iterating and improving.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/60b6ade7408e00682896fa54e4044216\" alt=\"Nvidia estimates (TIKR)\" title=\"Nvidia estimates (TIKR)\" tg-width=\"1280\" tg-height=\"768\"/><span>Nvidia estimates (TIKR)</span></p><p>Nvidia’s growth rates are expected to slow further this year, and more so through 2026. Now, I don’t think Huang is dumb, he can also view Wall Street’s consensus and I believe management is fully aware that analysts don’t think Nvidia can continue on its monstrous and spectacular performances that the team achieved in the last two FYs after Nvidia concludes its report for the final quarter of fiscal 2025. Microsoft CFO Amy Hood (MSFT) demonstrates just how much the hyperscaler is keenly aware of what Wall Street is prognosticating, as she highlighted in her recent memo to her staff:</p><blockquote><p>As a reminder, our stock trades not only on our results, but on our outlook for the next quarter and beyond. Investors listen to our earnings call to gain deeper insights into these indicators. - (Article on Amy Hood’s memo to staff)</p></blockquote><p>Therefore, I expect Nvidia to help stoke more bullish sentiments on AI compute and provide more proof points for investors to chew on, as the company will most certainly want to regain the bullish narrative after this week’s uncertainties. Favorable commentary by Microsoft and Meta (META) in their respective earnings attempt to control the fallout from DeepSeek. Therefore, I believe they corroborate Nvidia’s optimism that the proliferation of more cost-efficient AI models should lead to a wider and deeper adoption by enterprises. Anthropic CEO Dario Amodei lent further credence to Nvidia’s proposition that the leading AI companies will need to spend even more (and not less) on AI compute to reach AGI (as quickly as possible), while “making sure” China doesn’t have access to these cutting-edge chips, as Amodei doubled down on the US in enforcing strict export controls to deny China’s access to the “millions of chips” that they need.</p><p>However, we also learned that Nvidia is strongly opposed to the Biden administration&#39;s attempt to enforce such harsh controls through the AI diffusion rules that the former President sent out just days before he left office. It remains to be seen whether the surge in demand from America and its allies can withstand the impact of reducing and lowering AI adoption in affected tier-two countries that could also hurt Nvidia’s revenue base and growth profile. Moreover, the Chinese government has started antitrust probes into Nvidia, reportedly as an attempt to strike back at the US, which could also hurt Nvidia’s business. I believe we must keep watch on these developments carefully, as the Trump administration is reportedly considering widening the export controls on Nvidia’s H20 chips (that are currently legal for export to China). While the discussions are still in an early stage, it already has an impact on NVDA’s buying sentiments, suggesting rapidly evolving market conditions. Hence, it could affect a further valuation re-rating on the stock, holding back more aggressive buying in the near term.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/03b1f8c7522b9f45f029ea6870de45f3\" alt=\"NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)\" title=\"NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)\" tg-width=\"1280\" tg-height=\"787\"/><span>NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)</span></p><p>NVDA undoubtedly suffered its most significant pullback since August and September last year, and marked by the “Jan lows&#34; as I indicated in the chart above. It’s important to note that the market isn’t dumb and likely cognizant of the risks I underscored earlier; that tremendous uncertainties relating to the Trump administration’s view on export controls and also how the proliferation of cheaper AI models could work out to lower the cost for AI application developers and spurring enterprise adoption.</p><p>Interestingly, NVDA’s forward EBITDA multiple of 26.1x is still markedly lower than its ten-year average of 33.4x (based on S&amp;P Cap IQ data). Also, its forward PEG ratio of 1.15 is almost 40% below its tech sector peers, showing that investors are still cautious on taking the AI hype too far. I believe the market is keenly aware that growth rates might be tempered through 2026, and thus we need to be careful to see how the surge in AI chips could work out based on the thesis that I’ve presented earlier. For high conviction investors who have confidence that Huang and his highly competent and innovative Nvidia team will have this all work out for us, the recent pullback that has been well-supported looks like an amazing time to buy more while the market remains pessimistic.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: DeepSeek Isn't Going To Topple The AI Gravy Train</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: DeepSeek Isn't Going To Topple The AI Gravy Train\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-31 15:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4753265-nvidia-deepseek-not-going-to-topple-ai-gravy-train><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryNvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.Looking deeper into the morass, I explain why DeepSeek isn't going to disrupt Nvidia's ...</p>\n\n<a href=\"https://seekingalpha.com/article/4753265-nvidia-deepseek-not-going-to-topple-ai-gravy-train\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NVDA":"英伟达"},"source_url":"https://seekingalpha.com/article/4753265-nvidia-deepseek-not-going-to-topple-ai-gravy-train","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1181266567","content_text":"SummaryNvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.Looking deeper into the morass, I explain why DeepSeek isn't going to disrupt Nvidia's proposition. Instead, there are good reasons to believe Nvidia should benefit.NVDA's valuation isn't excessive, and the market seems to have already considered high execution risks ahead.The King of AI doesn't seem perturbed with the fallout, as the leading American hyperscalers are expected to press on with their AI infra buildout.I argue why the steep selloff represents an amazing opportunity to load up more shares, as we take advantage of the confusion in the market.BING-JHEN HONGThe biggest drop in recent memory on Monday took Nvidia shareholders on a wild ride this week, as dip-buyers (retail investors?) engaged in aggressive purchases to help prop up NVDA stock on Tuesday. However, the topsy-turvy week took another turn for the worse as the stock is down more than 4% on Wednesday as I write this update, showing just how uncertain the market sentiments are for the undisputed King of AI chips. I presented why NVDA's thesis was worth considering in my last update as the Blackwell ramp looks ready to move into production.Given the deluge of Nvidia articles you might have read over the past few days, I don’t think I need to go into detail to remind you that DeepSeek caused the knee-jerk reaction in the market on Monday. Surprisingly, the previous week’s reaction was relatively “muted,” as if the market was too focused on President Trump’s inauguration and “forgot” about the threats lurking in the background as the China-based AI company impressed its US competitors with its AI chops.I’ve been following DeepSeek very closely since Christmas when the little known (then) Chinese AI startup launched its V3 AI model, that preluded the unveiling of its breathtaking R1 reasoning model that took many by surprise. While impressed, I believe the fear that led to such a massive selloff is overdone. Fortuitously, Nvidia made it clear that DeepSeek’s achievements on significantly improving the cost efficiencies of AI models should expand the need for more GPUs, spurring broader adoption of enterprise AI use cases, and expand the ecosystem of AI application companies. That seems to be the case for AI startups as VCs who were cautious about funding companies involved in LLM development are seeing more opportunities to partake in funding AI startups involved in developing applications. That’s good news, isn’t it? Enterprise's skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.Former Tesla (TSLA) AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by highlighting that “Deep Learning has a legendary ravenous appetite for compute, like no other algorithm that has ever been developed in AI.” He also reminded us that he “would never bet against compute as the upper bound for achievable intelligence in the long run.”Sure, some might contend that Karpathy could have understated the immense innovative and technical ingenuities of DeepSeek’s researchers and engineers in their ability to achieve such remarkable feats of efficiencies. However, the Jevons paradox’s jab by Microsoft CEO Satya Nadella (MSFT) is a reminder that cost efficiencies shouldn’t lead to lower AI compute consumption, but should instead drive a breakthrough in demand, particularly in enterprises that have yet to embrace AI fully or still in the experimentation phase.And who’s the main beneficiary as AI compute continues to take centerstage in the battle and race for AI supremacy? Who else other than Nvidia? Jensen Huang has built such an incredible ecosystem advantage spanning from chips, to Arm-based CPU integration (ARM), to InfiniBand and Ethernet networking bundles, allowing the company to scale quickly, while iterating to launch faster and ship faster than its rivals, while executing the extremely sticky CUDA “lock” to prevent unintentional leakages of market share to arch rivals like AMD (AMD).Consider this. Earlier today, the Q4 earnings release by EUV leader ASML (ASML) refuted the fallacy of fearful investors who “sold first and asked questions later” on Monday, as they worry about the possible ramifications from DeepSeek’s tremendous algo efficiencies. ASML drummed up its support for improved AI growth prospects, underscoring its belief that AI demand isn’t hitting a plateau yet, contrary to the misconception by some in the financial media earlier this week, as they fanned the flames of DeepSeek’s “destructive innovation” on the moat of Nvidia and the AI ecosystem in America that has been built on massive AI compute requirements.If anything, I believe it has driven OpenAI CEO Sam Altman and his American peers to rush toward AGI as quickly as possible, bolstered by the less onerous AI regulatory regime, under the guidance of White House crypto and AI czar David Sacks. If anything, America now recognizes that it needs to “wake up” from its slumber and complacency, and see this as its “Sputnik moment” to make sure it regains the bullish AI narrative in the market, and work hard to avoid losing market and mind share to DeepSeek and its Chinese peers.Furthermore, let’s not forget that Nvidia is the main technology partner of President Trump’s signature $500B Stargate project. The public private partnership involving Oracle (ORCL), OpenAI, and SoftBank is a highly ambitious attempt to drive massive AI infra investments, underpinned by Nvidia and Arm as the main chip partners.Nvidia is estimated to capture between 25% and 50% of the total spending, making Stargate an extremely lucrative venture (potentially) for Jensen Huang and his team over the next four years. While funding remains uncertain and likely to be the case in the near term, I believe we shouldn’t understate the significant growth optionality attributed to Nvidia’s principal role here. And with Masayoshi Son’s SoftBank expected to borrow against its Arm shares to finance the project, I’m pretty confident that Son will be keen to make sure Arm and Nvidia remain as the principal chip partners in the project, keeping AMD at bay. While it’s possible that OpenAI might introduce its in-house AI custom chips (possibly with Broadcom (AVGO)) as a hedge against Nvidia’s chip supply, it’s not likely to become the default mode that OpenAI will abide by, unless Nvidia’s tech ecosystem proves to be inferior when considering overall TCO.Nvidia is also expected to diversify its reliance on data centers even as it will likely remain as the company’s most pivotal growth vector in the near and medium term. As we observed at this year’s CES, Nvidia is anticipated to be a key player in the autonomous driving scene, as it’s also a key tech partner for Tesla’s autonomous driving ambitions. As Nvidia moves beyond AI applications into AI agents and subsequently, physical AI and robotics, I believe opportunities to build another highly lucrative stream of revenue from these pillars shouldn’t be underestimated.While AMD and Intel (INTC) are the undisputed leaders in the PC segment, Nvidia’s take with Project DIGITS marks it a serious foray to try and disrupt the incumbents’ hold on the non data center market. I’m not surprised that the company sees the opportunity to disrupt the PC market as ripe and opportunistic, given its lack of exposure there. Moreover, as AI PCs are expected to gain cadence, it makes absolute sense for Nvidia to “smell blood,” Hence, although the initial opportunities are limited to developers and advanced users for now, I wouldn’t be surprised to see the company make a more determined move to break into the mainstream market over the next couple of years, given the speed at which the company is iterating and improving.Nvidia estimates (TIKR)Nvidia’s growth rates are expected to slow further this year, and more so through 2026. Now, I don’t think Huang is dumb, he can also view Wall Street’s consensus and I believe management is fully aware that analysts don’t think Nvidia can continue on its monstrous and spectacular performances that the team achieved in the last two FYs after Nvidia concludes its report for the final quarter of fiscal 2025. Microsoft CFO Amy Hood (MSFT) demonstrates just how much the hyperscaler is keenly aware of what Wall Street is prognosticating, as she highlighted in her recent memo to her staff:As a reminder, our stock trades not only on our results, but on our outlook for the next quarter and beyond. Investors listen to our earnings call to gain deeper insights into these indicators. - (Article on Amy Hood’s memo to staff)Therefore, I expect Nvidia to help stoke more bullish sentiments on AI compute and provide more proof points for investors to chew on, as the company will most certainly want to regain the bullish narrative after this week’s uncertainties. Favorable commentary by Microsoft and Meta (META) in their respective earnings attempt to control the fallout from DeepSeek. Therefore, I believe they corroborate Nvidia’s optimism that the proliferation of more cost-efficient AI models should lead to a wider and deeper adoption by enterprises. Anthropic CEO Dario Amodei lent further credence to Nvidia’s proposition that the leading AI companies will need to spend even more (and not less) on AI compute to reach AGI (as quickly as possible), while “making sure” China doesn’t have access to these cutting-edge chips, as Amodei doubled down on the US in enforcing strict export controls to deny China’s access to the “millions of chips” that they need.However, we also learned that Nvidia is strongly opposed to the Biden administration's attempt to enforce such harsh controls through the AI diffusion rules that the former President sent out just days before he left office. It remains to be seen whether the surge in demand from America and its allies can withstand the impact of reducing and lowering AI adoption in affected tier-two countries that could also hurt Nvidia’s revenue base and growth profile. Moreover, the Chinese government has started antitrust probes into Nvidia, reportedly as an attempt to strike back at the US, which could also hurt Nvidia’s business. I believe we must keep watch on these developments carefully, as the Trump administration is reportedly considering widening the export controls on Nvidia’s H20 chips (that are currently legal for export to China). While the discussions are still in an early stage, it already has an impact on NVDA’s buying sentiments, suggesting rapidly evolving market conditions. Hence, it could affect a further valuation re-rating on the stock, holding back more aggressive buying in the near term.NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)NVDA undoubtedly suffered its most significant pullback since August and September last year, and marked by the “Jan lows\" as I indicated in the chart above. It’s important to note that the market isn’t dumb and likely cognizant of the risks I underscored earlier; that tremendous uncertainties relating to the Trump administration’s view on export controls and also how the proliferation of cheaper AI models could work out to lower the cost for AI application developers and spurring enterprise adoption.Interestingly, NVDA’s forward EBITDA multiple of 26.1x is still markedly lower than its ten-year average of 33.4x (based on S&P Cap IQ data). Also, its forward PEG ratio of 1.15 is almost 40% below its tech sector peers, showing that investors are still cautious on taking the AI hype too far. I believe the market is keenly aware that growth rates might be tempered through 2026, and thus we need to be careful to see how the surge in AI chips could work out based on the thesis that I’ve presented earlier. For high conviction investors who have confidence that Huang and his highly competent and innovative Nvidia team will have this all work out for us, the recent pullback that has been well-supported looks like an amazing time to buy more while the market remains pessimistic.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":398486462439560,"gmtCreate":1738312214149,"gmtModify":1738312379372,"author":{"id":"4157110210211862","authorId":"4157110210211862","name":"Prashant0804","avatar":"https://community-static.tradeup.com/news/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"4157110210211862","authorIdStr":"4157110210211862"},"htmlText":"Share your opinion about this news…","listText":"Share your opinion about this news…","text":"Share your opinion about this news…","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/398486462439560","repostId":1181266567,"repostType":2,"repost":{"id":"1181266567","kind":"news","pubTimestamp":1738310377,"share":"https://ttm.financial/m/news/1181266567?lang=&edition=fundamental","pubTime":"2025-01-31 15:59","market":"us","language":"en","title":"Nvidia: DeepSeek Isn't Going To Topple The AI Gravy Train","url":"https://stock-news.laohu8.com/highlight/detail?id=1181266567","media":"Seeking Alpha","summary":"Enterprise's skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.Former Tesla  AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by hig","content":"<html><head></head><body><h2 id=\"id_932591761\">Summary</h2><ul style=\"\"><li><p>Nvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.</p></li><li><p>Looking deeper into the morass, I explain why DeepSeek isn&#39;t going to disrupt Nvidia&#39;s proposition. Instead, there are good reasons to believe Nvidia should benefit.</p></li><li><p>NVDA&#39;s valuation isn&#39;t excessive, and the market seems to have already considered high execution risks ahead.</p></li><li><p>The King of AI doesn&#39;t seem perturbed with the fallout, as the leading American hyperscalers are expected to press on with their AI infra buildout.</p></li><li><p>I argue why the steep selloff represents an amazing opportunity to load up more shares, as we take advantage of the confusion in the market.</p></li></ul><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/6144f6f01bec9d39bca22c82ac595a7e\" alt=\"BING-JHEN HONG\" title=\"BING-JHEN HONG\" tg-width=\"750\" tg-height=\"500\"/><span>BING-JHEN HONG</span></p><p>The biggest drop in recent memory on Monday took Nvidia shareholders on a wild ride this week, as dip-buyers (retail investors?) engaged in aggressive purchases to help prop up NVDA stock on Tuesday. However, the topsy-turvy week took another turn for the worse as the stock is down more than 4% on Wednesday as I write this update, showing just how uncertain the market sentiments are for the undisputed King of AI chips. I presented why NVDA&#39;s thesis was worth considering in my last update as the Blackwell ramp looks ready to move into production.</p><p>Given the deluge of Nvidia articles you might have read over the past few days, I don’t think I need to go into detail to remind you that DeepSeek caused the knee-jerk reaction in the market on Monday. Surprisingly, the previous week’s reaction was relatively “muted,” as if the market was too focused on President Trump’s inauguration and “forgot” about the threats lurking in the background as the China-based AI company impressed its US competitors with its AI chops.</p><p>I’ve been following DeepSeek very closely since Christmas when the little known (then) Chinese AI startup launched its V3 AI model, that preluded the unveiling of its breathtaking R1 reasoning model that took many by surprise. While impressed, I believe the fear that led to such a massive selloff is overdone. Fortuitously, Nvidia made it clear that DeepSeek’s achievements on significantly improving the cost efficiencies of AI models should expand the need for more GPUs, spurring broader adoption of enterprise AI use cases, and expand the ecosystem of AI application companies. That seems to be the case for AI startups as VCs who were cautious about funding companies involved in LLM development are seeing more opportunities to partake in funding AI startups involved in developing applications. That’s good news, isn’t it? Enterprise&#39;s skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.</p><p>Former Tesla (TSLA) AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by highlighting that “Deep Learning has a legendary ravenous appetite for compute, like no other algorithm that has ever been developed in AI.” He also reminded us that he “would never bet against compute as the upper bound for achievable intelligence in the long run.”</p><p>Sure, some might contend that Karpathy could have understated the immense innovative and technical ingenuities of DeepSeek’s researchers and engineers in their ability to achieve such remarkable feats of efficiencies. However, the Jevons paradox’s jab by Microsoft CEO Satya Nadella (MSFT) is a reminder that cost efficiencies shouldn’t lead to lower AI compute consumption, but should instead drive a breakthrough in demand, particularly in enterprises that have yet to embrace AI fully or still in the experimentation phase.</p><p>And who’s the main beneficiary as AI compute continues to take centerstage in the battle and race for AI supremacy? Who else other than Nvidia? Jensen Huang has built such an incredible ecosystem advantage spanning from chips, to Arm-based CPU integration (ARM), to InfiniBand and Ethernet networking bundles, allowing the company to scale quickly, while iterating to launch faster and ship faster than its rivals, while executing the extremely sticky CUDA “lock” to prevent unintentional leakages of market share to arch rivals like AMD (AMD).</p><p>Consider this. Earlier today, the Q4 earnings release by EUV leader ASML (ASML) refuted the fallacy of fearful investors who “sold first and asked questions later” on Monday, as they worry about the possible ramifications from DeepSeek’s tremendous algo efficiencies. ASML drummed up its support for improved AI growth prospects, underscoring its belief that AI demand isn’t hitting a plateau yet, contrary to the misconception by some in the financial media earlier this week, as they fanned the flames of DeepSeek’s “destructive innovation” on the moat of Nvidia and the AI ecosystem in America that has been built on massive AI compute requirements.</p><p>If anything, I believe it has driven OpenAI CEO Sam Altman and his American peers to rush toward AGI as quickly as possible, bolstered by the less onerous AI regulatory regime, under the guidance of White House crypto and AI czar David Sacks. If anything, America now recognizes that it needs to “wake up” from its slumber and complacency, and see this as its “Sputnik moment” to make sure it regains the bullish AI narrative in the market, and work hard to avoid losing market and mind share to DeepSeek and its Chinese peers.</p><p>Furthermore, let’s not forget that Nvidia is the main technology partner of President Trump’s signature $500B Stargate project. The public private partnership involving Oracle (ORCL), OpenAI, and SoftBank is a highly ambitious attempt to drive massive AI infra investments, underpinned by Nvidia and Arm as the main chip partners.</p><p>Nvidia is estimated to capture between 25% and 50% of the total spending, making Stargate an extremely lucrative venture (potentially) for Jensen Huang and his team over the next four years. While funding remains uncertain and likely to be the case in the near term, I believe we shouldn’t understate the significant growth optionality attributed to Nvidia’s principal role here. And with Masayoshi Son’s SoftBank expected to borrow against its Arm shares to finance the project, I’m pretty confident that Son will be keen to make sure Arm and Nvidia remain as the principal chip partners in the project, keeping AMD at bay. While it’s possible that OpenAI might introduce its in-house AI custom chips (possibly with Broadcom (AVGO)) as a hedge against Nvidia’s chip supply, it’s not likely to become the default mode that OpenAI will abide by, unless Nvidia’s tech ecosystem proves to be inferior when considering overall TCO.</p><p>Nvidia is also expected to diversify its reliance on data centers even as it will likely remain as the company’s most pivotal growth vector in the near and medium term. As we observed at this year’s CES, Nvidia is anticipated to be a key player in the autonomous driving scene, as it’s also a key tech partner for Tesla’s autonomous driving ambitions. As Nvidia moves beyond AI applications into AI agents and subsequently, physical AI and robotics, I believe opportunities to build another highly lucrative stream of revenue from these pillars shouldn’t be underestimated.</p><p>While AMD and Intel (INTC) are the undisputed leaders in the PC segment, Nvidia’s take with Project DIGITS marks it a serious foray to try and disrupt the incumbents’ hold on the non data center market. I’m not surprised that the company sees the opportunity to disrupt the PC market as ripe and opportunistic, given its lack of exposure there. Moreover, as AI PCs are expected to gain cadence, it makes absolute sense for Nvidia to “smell blood,” Hence, although the initial opportunities are limited to developers and advanced users for now, I wouldn’t be surprised to see the company make a more determined move to break into the mainstream market over the next couple of years, given the speed at which the company is iterating and improving.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/60b6ade7408e00682896fa54e4044216\" alt=\"Nvidia estimates (TIKR)\" title=\"Nvidia estimates (TIKR)\" tg-width=\"1280\" tg-height=\"768\"/><span>Nvidia estimates (TIKR)</span></p><p>Nvidia’s growth rates are expected to slow further this year, and more so through 2026. Now, I don’t think Huang is dumb, he can also view Wall Street’s consensus and I believe management is fully aware that analysts don’t think Nvidia can continue on its monstrous and spectacular performances that the team achieved in the last two FYs after Nvidia concludes its report for the final quarter of fiscal 2025. Microsoft CFO Amy Hood (MSFT) demonstrates just how much the hyperscaler is keenly aware of what Wall Street is prognosticating, as she highlighted in her recent memo to her staff:</p><blockquote><p>As a reminder, our stock trades not only on our results, but on our outlook for the next quarter and beyond. Investors listen to our earnings call to gain deeper insights into these indicators. - (Article on Amy Hood’s memo to staff)</p></blockquote><p>Therefore, I expect Nvidia to help stoke more bullish sentiments on AI compute and provide more proof points for investors to chew on, as the company will most certainly want to regain the bullish narrative after this week’s uncertainties. Favorable commentary by Microsoft and Meta (META) in their respective earnings attempt to control the fallout from DeepSeek. Therefore, I believe they corroborate Nvidia’s optimism that the proliferation of more cost-efficient AI models should lead to a wider and deeper adoption by enterprises. Anthropic CEO Dario Amodei lent further credence to Nvidia’s proposition that the leading AI companies will need to spend even more (and not less) on AI compute to reach AGI (as quickly as possible), while “making sure” China doesn’t have access to these cutting-edge chips, as Amodei doubled down on the US in enforcing strict export controls to deny China’s access to the “millions of chips” that they need.</p><p>However, we also learned that Nvidia is strongly opposed to the Biden administration&#39;s attempt to enforce such harsh controls through the AI diffusion rules that the former President sent out just days before he left office. It remains to be seen whether the surge in demand from America and its allies can withstand the impact of reducing and lowering AI adoption in affected tier-two countries that could also hurt Nvidia’s revenue base and growth profile. Moreover, the Chinese government has started antitrust probes into Nvidia, reportedly as an attempt to strike back at the US, which could also hurt Nvidia’s business. I believe we must keep watch on these developments carefully, as the Trump administration is reportedly considering widening the export controls on Nvidia’s H20 chips (that are currently legal for export to China). While the discussions are still in an early stage, it already has an impact on NVDA’s buying sentiments, suggesting rapidly evolving market conditions. Hence, it could affect a further valuation re-rating on the stock, holding back more aggressive buying in the near term.</p><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/03b1f8c7522b9f45f029ea6870de45f3\" alt=\"NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)\" title=\"NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)\" tg-width=\"1280\" tg-height=\"787\"/><span>NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)</span></p><p>NVDA undoubtedly suffered its most significant pullback since August and September last year, and marked by the “Jan lows&#34; as I indicated in the chart above. It’s important to note that the market isn’t dumb and likely cognizant of the risks I underscored earlier; that tremendous uncertainties relating to the Trump administration’s view on export controls and also how the proliferation of cheaper AI models could work out to lower the cost for AI application developers and spurring enterprise adoption.</p><p>Interestingly, NVDA’s forward EBITDA multiple of 26.1x is still markedly lower than its ten-year average of 33.4x (based on S&amp;P Cap IQ data). Also, its forward PEG ratio of 1.15 is almost 40% below its tech sector peers, showing that investors are still cautious on taking the AI hype too far. I believe the market is keenly aware that growth rates might be tempered through 2026, and thus we need to be careful to see how the surge in AI chips could work out based on the thesis that I’ve presented earlier. For high conviction investors who have confidence that Huang and his highly competent and innovative Nvidia team will have this all work out for us, the recent pullback that has been well-supported looks like an amazing time to buy more while the market remains pessimistic.</p></body></html>","source":"lsy1728464409321","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Nvidia: DeepSeek Isn't Going To Topple The AI Gravy Train</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNvidia: DeepSeek Isn't Going To Topple The AI Gravy Train\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-31 15:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4753265-nvidia-deepseek-not-going-to-topple-ai-gravy-train><strong>Seeking Alpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryNvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.Looking deeper into the morass, I explain why DeepSeek isn't going to disrupt Nvidia's ...</p>\n\n<a href=\"https://seekingalpha.com/article/4753265-nvidia-deepseek-not-going-to-topple-ai-gravy-train\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"NVDA":"英伟达"},"source_url":"https://seekingalpha.com/article/4753265-nvidia-deepseek-not-going-to-topple-ai-gravy-train","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1181266567","content_text":"SummaryNvidia investors felt pain on Monday as the DeepSeek fear attempted to crumble its AI compute thesis.Looking deeper into the morass, I explain why DeepSeek isn't going to disrupt Nvidia's proposition. Instead, there are good reasons to believe Nvidia should benefit.NVDA's valuation isn't excessive, and the market seems to have already considered high execution risks ahead.The King of AI doesn't seem perturbed with the fallout, as the leading American hyperscalers are expected to press on with their AI infra buildout.I argue why the steep selloff represents an amazing opportunity to load up more shares, as we take advantage of the confusion in the market.BING-JHEN HONGThe biggest drop in recent memory on Monday took Nvidia shareholders on a wild ride this week, as dip-buyers (retail investors?) engaged in aggressive purchases to help prop up NVDA stock on Tuesday. However, the topsy-turvy week took another turn for the worse as the stock is down more than 4% on Wednesday as I write this update, showing just how uncertain the market sentiments are for the undisputed King of AI chips. I presented why NVDA's thesis was worth considering in my last update as the Blackwell ramp looks ready to move into production.Given the deluge of Nvidia articles you might have read over the past few days, I don’t think I need to go into detail to remind you that DeepSeek caused the knee-jerk reaction in the market on Monday. Surprisingly, the previous week’s reaction was relatively “muted,” as if the market was too focused on President Trump’s inauguration and “forgot” about the threats lurking in the background as the China-based AI company impressed its US competitors with its AI chops.I’ve been following DeepSeek very closely since Christmas when the little known (then) Chinese AI startup launched its V3 AI model, that preluded the unveiling of its breathtaking R1 reasoning model that took many by surprise. While impressed, I believe the fear that led to such a massive selloff is overdone. Fortuitously, Nvidia made it clear that DeepSeek’s achievements on significantly improving the cost efficiencies of AI models should expand the need for more GPUs, spurring broader adoption of enterprise AI use cases, and expand the ecosystem of AI application companies. That seems to be the case for AI startups as VCs who were cautious about funding companies involved in LLM development are seeing more opportunities to partake in funding AI startups involved in developing applications. That’s good news, isn’t it? Enterprise's skepticism in realizing the value of AI more broadly has been identified as one of the key impediments for AI to gain further traction, moving from the lab to the marketplace. Hence, I’m in concurrence with Nvidia that this should spur the proliferation of opportunities in AI applications, and drive the need for even more compute and not less.Former Tesla (TSLA) AI director Andrej Karpathy prefaced his recent views on DeepSeek’s breakthrough by highlighting that “Deep Learning has a legendary ravenous appetite for compute, like no other algorithm that has ever been developed in AI.” He also reminded us that he “would never bet against compute as the upper bound for achievable intelligence in the long run.”Sure, some might contend that Karpathy could have understated the immense innovative and technical ingenuities of DeepSeek’s researchers and engineers in their ability to achieve such remarkable feats of efficiencies. However, the Jevons paradox’s jab by Microsoft CEO Satya Nadella (MSFT) is a reminder that cost efficiencies shouldn’t lead to lower AI compute consumption, but should instead drive a breakthrough in demand, particularly in enterprises that have yet to embrace AI fully or still in the experimentation phase.And who’s the main beneficiary as AI compute continues to take centerstage in the battle and race for AI supremacy? Who else other than Nvidia? Jensen Huang has built such an incredible ecosystem advantage spanning from chips, to Arm-based CPU integration (ARM), to InfiniBand and Ethernet networking bundles, allowing the company to scale quickly, while iterating to launch faster and ship faster than its rivals, while executing the extremely sticky CUDA “lock” to prevent unintentional leakages of market share to arch rivals like AMD (AMD).Consider this. Earlier today, the Q4 earnings release by EUV leader ASML (ASML) refuted the fallacy of fearful investors who “sold first and asked questions later” on Monday, as they worry about the possible ramifications from DeepSeek’s tremendous algo efficiencies. ASML drummed up its support for improved AI growth prospects, underscoring its belief that AI demand isn’t hitting a plateau yet, contrary to the misconception by some in the financial media earlier this week, as they fanned the flames of DeepSeek’s “destructive innovation” on the moat of Nvidia and the AI ecosystem in America that has been built on massive AI compute requirements.If anything, I believe it has driven OpenAI CEO Sam Altman and his American peers to rush toward AGI as quickly as possible, bolstered by the less onerous AI regulatory regime, under the guidance of White House crypto and AI czar David Sacks. If anything, America now recognizes that it needs to “wake up” from its slumber and complacency, and see this as its “Sputnik moment” to make sure it regains the bullish AI narrative in the market, and work hard to avoid losing market and mind share to DeepSeek and its Chinese peers.Furthermore, let’s not forget that Nvidia is the main technology partner of President Trump’s signature $500B Stargate project. The public private partnership involving Oracle (ORCL), OpenAI, and SoftBank is a highly ambitious attempt to drive massive AI infra investments, underpinned by Nvidia and Arm as the main chip partners.Nvidia is estimated to capture between 25% and 50% of the total spending, making Stargate an extremely lucrative venture (potentially) for Jensen Huang and his team over the next four years. While funding remains uncertain and likely to be the case in the near term, I believe we shouldn’t understate the significant growth optionality attributed to Nvidia’s principal role here. And with Masayoshi Son’s SoftBank expected to borrow against its Arm shares to finance the project, I’m pretty confident that Son will be keen to make sure Arm and Nvidia remain as the principal chip partners in the project, keeping AMD at bay. While it’s possible that OpenAI might introduce its in-house AI custom chips (possibly with Broadcom (AVGO)) as a hedge against Nvidia’s chip supply, it’s not likely to become the default mode that OpenAI will abide by, unless Nvidia’s tech ecosystem proves to be inferior when considering overall TCO.Nvidia is also expected to diversify its reliance on data centers even as it will likely remain as the company’s most pivotal growth vector in the near and medium term. As we observed at this year’s CES, Nvidia is anticipated to be a key player in the autonomous driving scene, as it’s also a key tech partner for Tesla’s autonomous driving ambitions. As Nvidia moves beyond AI applications into AI agents and subsequently, physical AI and robotics, I believe opportunities to build another highly lucrative stream of revenue from these pillars shouldn’t be underestimated.While AMD and Intel (INTC) are the undisputed leaders in the PC segment, Nvidia’s take with Project DIGITS marks it a serious foray to try and disrupt the incumbents’ hold on the non data center market. I’m not surprised that the company sees the opportunity to disrupt the PC market as ripe and opportunistic, given its lack of exposure there. Moreover, as AI PCs are expected to gain cadence, it makes absolute sense for Nvidia to “smell blood,” Hence, although the initial opportunities are limited to developers and advanced users for now, I wouldn’t be surprised to see the company make a more determined move to break into the mainstream market over the next couple of years, given the speed at which the company is iterating and improving.Nvidia estimates (TIKR)Nvidia’s growth rates are expected to slow further this year, and more so through 2026. Now, I don’t think Huang is dumb, he can also view Wall Street’s consensus and I believe management is fully aware that analysts don’t think Nvidia can continue on its monstrous and spectacular performances that the team achieved in the last two FYs after Nvidia concludes its report for the final quarter of fiscal 2025. Microsoft CFO Amy Hood (MSFT) demonstrates just how much the hyperscaler is keenly aware of what Wall Street is prognosticating, as she highlighted in her recent memo to her staff:As a reminder, our stock trades not only on our results, but on our outlook for the next quarter and beyond. Investors listen to our earnings call to gain deeper insights into these indicators. - (Article on Amy Hood’s memo to staff)Therefore, I expect Nvidia to help stoke more bullish sentiments on AI compute and provide more proof points for investors to chew on, as the company will most certainly want to regain the bullish narrative after this week’s uncertainties. Favorable commentary by Microsoft and Meta (META) in their respective earnings attempt to control the fallout from DeepSeek. Therefore, I believe they corroborate Nvidia’s optimism that the proliferation of more cost-efficient AI models should lead to a wider and deeper adoption by enterprises. Anthropic CEO Dario Amodei lent further credence to Nvidia’s proposition that the leading AI companies will need to spend even more (and not less) on AI compute to reach AGI (as quickly as possible), while “making sure” China doesn’t have access to these cutting-edge chips, as Amodei doubled down on the US in enforcing strict export controls to deny China’s access to the “millions of chips” that they need.However, we also learned that Nvidia is strongly opposed to the Biden administration's attempt to enforce such harsh controls through the AI diffusion rules that the former President sent out just days before he left office. It remains to be seen whether the surge in demand from America and its allies can withstand the impact of reducing and lowering AI adoption in affected tier-two countries that could also hurt Nvidia’s revenue base and growth profile. Moreover, the Chinese government has started antitrust probes into Nvidia, reportedly as an attempt to strike back at the US, which could also hurt Nvidia’s business. I believe we must keep watch on these developments carefully, as the Trump administration is reportedly considering widening the export controls on Nvidia’s H20 chips (that are currently legal for export to China). While the discussions are still in an early stage, it already has an impact on NVDA’s buying sentiments, suggesting rapidly evolving market conditions. Hence, it could affect a further valuation re-rating on the stock, holding back more aggressive buying in the near term.NVDA price chart (weekly, medium-term, adjusted for dividends) (TradingView)NVDA undoubtedly suffered its most significant pullback since August and September last year, and marked by the “Jan lows\" as I indicated in the chart above. It’s important to note that the market isn’t dumb and likely cognizant of the risks I underscored earlier; that tremendous uncertainties relating to the Trump administration’s view on export controls and also how the proliferation of cheaper AI models could work out to lower the cost for AI application developers and spurring enterprise adoption.Interestingly, NVDA’s forward EBITDA multiple of 26.1x is still markedly lower than its ten-year average of 33.4x (based on S&P Cap IQ data). Also, its forward PEG ratio of 1.15 is almost 40% below its tech sector peers, showing that investors are still cautious on taking the AI hype too far. I believe the market is keenly aware that growth rates might be tempered through 2026, and thus we need to be careful to see how the surge in AI chips could work out based on the thesis that I’ve presented earlier. For high conviction investors who have confidence that Huang and his highly competent and innovative Nvidia team will have this all work out for us, the recent pullback that has been well-supported looks like an amazing time to buy more while the market remains pessimistic.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":20,"commentSize":2,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}