Nvidia stock (NVDA) has struggled to regain momentum after a 171% rally in 2024, gaining only 4% in the past six months, underperforming the S&P 500 and Nasdaq Composite indexes. As of Feb. 24, the stock was down 3% this year. The company experienced a record market value drop of nearly $600 billion in one day following the launch of the DeepSeek chatbot in late January. DeepSeek’s developer claims the system cost significantly less than its U.S. counterparts to build.
Nvidia faces potential tighter export restrictions from the Trump administration, according to Bloomberg. The Commerce Department is investigating whether DeepSeek used banned chips to train its large-language models, which could lead to a U.S. export rule overhaul. Despite these challenges, Nvidia remains a critical player in the tech sector, with major clients like Meta Platforms, Microsoft, Google, and Amazon relying on its graphics-processing units for AI and computing tasks.
Wednesday’s fiscal-Q4 earnings report is crucial for Nvidia as the market watches Blackwell chip demand, tariff risks, and DeepSeek’s impact on profitability. Analysts expect a profit of $25.3 billion, or 84 cents per share, with a gross margin around 73.5%. Revenue is projected at $38.05 billion, a 72% increase from the previous year, driven by an 82% rise in data-center sales to $33.6 billion. Nvidia has exceeded Wall Street’s EPS estimates for eight consecutive quarters.
CFO Colette Kress stated in November that Blackwell was in full production and expected to generate several billion dollars in Q4 revenue. Investment firm Wedbush remains bullish on Nvidia shares, expecting strong performance and increased investor confidence. KeyBanc raised its price target to $190 from $180, anticipating Q4 results to beat estimates. UBS analyst Timothy Arcuri expects solid results and guidance in line with or ahead of expectations. — news from TheStreet