Core Viewpoint - Nvidia's stock experienced a decline of 16% following news of a Chinese AI start-up, DeepSeek, which developed a cost-effective training method for AI models, raising concerns about demand for Nvidia's GPUs. However, Nvidia's CEO Jensen Huang suggested that the emergence of new AI models could actually increase GPU demand instead [1][2][17]. Financial Performance - Nvidia reported record revenue of 130.5billionforfiscal2025,markinga114128.6 billion [5]. - The data center segment contributed 115.1billiontototalrevenue,reflectingasignificant14211 billion in sales, the fastest product ramp-up in Nvidia's history [6]. Product Innovation - The Blackwell GB200 GPU can perform AI inference at speeds up to 30 times faster than Nvidia's previous flagship chip, the H100, enhancing the efficiency of AI applications [7]. - Nvidia plans to scale up production of the Blackwell GPUs due to high demand from customers, indicating a robust market appetite for AI computing power [8]. Market Dynamics - DeepSeek's V3 model was trained for only 5.6million,raisingconcernsaboutthecompetitivelandscapeforAIdevelopmentandthepotentialimpactonNvidia′smarketposition[9].−DespiteDeepSeek′sinnovations,majorAIdeveloperslikeOpenAIareshiftingtowards"reasoning"modelsthatrequiresignificantlymorecomputationalresources,whichcoulddrivedemandforNvidia′schips[14][15].StockValuation−Nvidia′sfiscal2025earningspershare(EPS)was2.99, resulting in a price-to-earnings (P/E) ratio of 42.5, which is 28% lower than its 10-year average of 59.3 [16]. - Wall Street's consensus estimates suggest Nvidia could achieve an EPS of $4.49 in fiscal 2026, leading to a forward P/E ratio of 27.7, indicating potential for significant stock price appreciation [16].
Nvidia(NVDA) The Motley Fool·2025-03-05 09:04