As NVIDIA (NVDA) prepares to report its fiscal fourth quarter, results after Deepseek’s shock, analysts are optimistic about winning expectations and raising their prospects when they enhance their Blackwell chips.
The chipmaker is expected to report revenue of $ 38.1 billion, according to analysts’ estimates composed of FDSet (FDS).
“NVIDIA’s upcoming revenue will crush Deepseek’s anxiety,” said Kevin Cook, shared with quartz. The company dominates the “technological stack that businesses want, and the next stacks they don’t even know they still need,” Cook said.
As the launch of Chinese artificial intelligence scares investors with its competitive models for reasoning in January, NVIDIA shares fell 17%, eradicating nearly $ 600 billion – a record loss for an American company. In December, a Hangzhou-based company launched a Depepeek-V3, a model that is said to cost only $ 5.6 million for training and development of NVIDIA-reduced chips.
Deepseek’s AI models – which demonstrated a presentation on an equal footing with those from Openai and Meta (Meta) for seemingly thousands of chips and billions of dollars less – questioned the big Big Tech costs for AI before many results from Alphabet, Amazon (AMZN), Meta and Microsoft.
While investors were waiting to see if the technology giants “would lower their bold forecasts for Capex data, the costs instead increased to $ 325 billion, Cook said.
“This is a long-term construction for these Goliati,” Cook said, adding that companies are not looking for an immediate return on investment, but rather make a “three to five-year bet when their infrastructure” will be crucial to the future development of AI.
Despite the reducing costs of training and conducting generative models of AI, “this does not necessarily reflect the overall cost of generative AI,” said John Belton, a portfolio manager at Gabelli Funds, in comments shared with Quartz. While “Depepeek has not introduced anything fundamentally new” for the lower costs leading to higher admission of AI, Belton said: “This slightly accelerated the percentage at which the training costs are reducing.”
However, the progress of Deepseek can have a short-term impact on NVIDIA and other chip males, as US officials are drawing tighter export control over China, Belton said.
On Tuesday, Reuters reported that Chinese AI companies, including Tencent (TCEHY), Alibaba (BABA) and Bytedance, are “significantly” increasing NVIDIA H20 chips, as demand is increasing for AI models at a lower price, such as those from DeePeek. The H20 chip was created specifically by NVIDIA to comply with existing export control directed at China and is less advanced than the chips sold to US companies.