Prediction: Nvidia Stock Is Going to Soar After Feb. 26

Core Viewpoint - Nvidia has faced a significant decline in stock value, losing over 10% in early 2025, primarily due to competition from DeepSeek's low-cost AI model [1][2] Group 1: Impact of DeepSeek's AI Model - DeepSeek trained its R1 reasoning model for only $6 million, which has raised concerns about reduced demand for Nvidia's AI chips from cloud computing companies and governments [2][3] - Following DeepSeek's success, Nvidia's stock dropped 17% on January 27, particularly after DeepSeek surpassed ChatGPT in downloads on the Apple app store [2] Group 2: Future Prospects for Nvidia - Despite current challenges, there are indications that spending on AI chips may continue to rise, potentially allowing Nvidia to recover when it reports its fiscal 2025 fourth-quarter results on February 26 [3][12] - Nvidia holds a dominant 90% market share in the AI chip sector, benefiting from significant investments in AI infrastructure by tech giants and governments [9][5] Group 3: Stargate Joint Venture - A joint venture named Stargate, involving SoftBank, OpenAI, and Oracle, plans to invest $100 billion in AI infrastructure, with a long-term goal of $500 billion over four years [6][7] - Nvidia is expected to be one of the initial technology partners in the Stargate project, which aims to construct 20 data centers and create approximately 100,000 jobs [7] Group 4: Continued Demand for AI Infrastructure - Major companies like Meta Platforms and Microsoft are unlikely to reduce their AI spending, as they recognize the need for heavy investments to support growing AI application demands [11] - Oracle's reliance on Nvidia's GPUs for AI infrastructure indicates a strong ongoing demand for Nvidia's products, with plans for additional cloud regions globally [10] Group 5: Revenue Growth Expectations - Analysts project Nvidia's revenue for fiscal 2026 to increase by 52% to over $196 billion, followed by a 21% increase in fiscal 2027 [13] - Nvidia's price target of $175 suggests a potential 46% upside from current levels, with expectations for upward revisions in revenue estimates due to continued AI investments [14][15] Group 6: Investment Considerations - Nvidia's forward earnings multiple of 23 is considered attractive compared to the Nasdaq-100 index's multiple of 27, making it a potentially smart investment opportunity [16]