Nvidia’s shares have risen less than 3% year to date, signaling a slowdown in its rally. Investors are cautious due to unprofitable generative AI software and cheaper open-source rivals from China potentially undermining top customers like OpenAI and Meta Platforms. Nvidia is set to report its fourth-quarter and full-year earnings on Feb. 26, with management guiding for $37.5 billion in revenue, a 70% year-over-year growth. Nvidia’s dominance relies on releasing advanced GPUs, which, despite being costly, offer performance improvements. The emergence of DeepSeek R1, an open-source model, poses a threat, but its impact may be limited. Experts dispute DeepSeek’s cost claims, and regulatory scrutiny is increasing. Meta Platforms remains committed to AI spending, planning long-term investments. Nvidia’s forward P/E ratio of 32 suggests reasonable pricing, but the stock remains a hold due to industry risks. — news from The Motley Fool
