Nvidia to report first earnings since shock debut of Chinese AI DeepSeek

Core Viewpoint - Nvidia's upcoming Q4 2024 earnings report is highly anticipated as investors seek insights into potential demand slowdown for semiconductor chips, particularly in the AI sector, which has significantly boosted the company's valuation to $3.1 trillion [1]. Group 1: Market Position and Challenges - Analysts expect Nvidia to retain its leadership in the AI chip market, but recent developments pose challenges, including Microsoft's cancellation of leases with private data center operators, raising concerns about the sustainability of AI infrastructure investments [2]. - The introduction of China's DeepSeek AI model, which outperformed many US models with lower training costs, has negatively impacted Nvidia's valuation, indicating that new AI models may not require Nvidia's high-end GPUs [3]. - Despite Nvidia's strong past performance, analysts are looking for indicators that the company can adapt to evolving AI demands [4]. Group 2: Future Outlook and Competition - The key question for Nvidia's Q4 earnings is not just financial performance but its ability to maintain market dominance as AI technology evolves, with market reactions dependent on the company's strategies to address emerging challenges [5]. - The launch of DeepSeek may not immediately affect Nvidia but could enable competitors like AMD and Intel to gain market share in the lower end of the AI infrastructure market [5]. - DeepSeek has set a new performance baseline for generative AI, allowing more organizations to explore AI applications [6].