Nvidia (Nasdaq: NVDA) received a bad start on the stock market in 2025 and lost more than 10% of its value from this letter, with Chinese artificial intelligence (AI) Start -up Deepseek’s launch of a cheap but capable AI model plays one Key role in the problems of the semiconductor giant.
When Deep claimed it only spent $ 6 million To train its R1 reasoning model that is able to compete with the O1 -Redeneer model of OpenAi, AI shares in the US have a large beating. NVIDIA shares was one of the biggest victims of the sale and 17% fell on January 27 after it emerged that Deepseek caught up the downloads of Chatgpt on the Apple App Store in the US
The cheap model of Deepseek aroused concern about large cloud computing companies and governments that sells their demand for the AI chips that Nvidia sells. However, a further consideration of the recent developments in the AI room suggests that the expenditure for AI chips can remain higher, so that the possibility that NVIDIA shares will regain his Mojo as soon as it releases its fiscal 2025 fourth quarter results on 26 February.
Let’s see why Nvidia could offer a clear update about the State of AI that could work with his quarterly report later this month.
In recent years, Tech giants and governments have collapsed a lot of money around the world into the development of AI infrastructure, and President Donald Trump gave AI’s prospects a huge boost last month.
On Tuesday, January 21, Trump announced that Soft bankOpeni, and Oracle (NYSE: ORCL) form a joint venture that is planning to invest $ 100 billion in AI infrastructure. The Joint Venture, known as Stargate, is ultimately planning to spend no less than $ 500 billion on building AI infrastructure in the US in the next four years.
The first AI data center from Stargate is already under construction in Texas, according to Oracle chairman Larry Ellison. The joint venture is expected to build 20 data centers, creating an estimated 100,000 jobs.
In a message in which the Stargate project was announced, OpenAI pointed out that the first financing will be provided by Softbank, OpenAi, Oracle and Abu Dhabi’s AI-oriented investment company, MGX. The post also emphasized that Nvidia will be one of the “initial technology partners” in Stargate.
NVIDIA was paramount in the AI revolution with its powerful graphic processing units (GPUs) based on the Ampere architecture that helped to have OpenAI Train Chatgpt. It has continued to push the envelope on the AI Accelerator market and has been pulling more powerful chips for the past three years based on his hopper and blackwell architectures.
This explains why Nvidia has retained a solid grip on the AI chip market with an estimated share of 90%. Since Nvidia has created a technology advantage over rivals in the AI chip market, it could remain the dominant power in this space. Since the GPUs of NVIDIA are the basic building blocks of AI data centers, given their ability to perform enormous calculations at the same time, so that companies can quickly train and deploy AI models, the ambitious investment plan of Stargate should ideally help the addressable market of the chip maker Improve.
Oracle, for example, depends on Nvidia’s GPUs to create AI infrastructure to rent customers, so that they can train AI models in the cloud. In September last year, Ellison noted that one of the largest data centers in Oracle is “800 megawatts and it will contain hectare Nvidia GP clusters that are able to train the world’s largest AI models.” This was followed by a comment from Oracle CEO Safra Catz at the December 2024 income conference that the company “supplied the world’s largest and fastest AI -Supercomputer, which scaled up to 65,000 Nvidia H200 GPUs.”
Oracle is planning to implement another 35 cloud regions around the world in addition to the 17 that it already has. It will not be surprising to see the hunger of the company that the GPUs of Nvidia are increasing. What is even more important, since Nvidia has worked with his supply chain partners to increase the output of his AI GPUs in 2025, it must be able to meet the higher demand for his chips that will probably occur after Stargate.
Meanwhile, like Meta platforms And Microsoft Does not limit their expenses to the AI infrastructure after the breakthrough of Deepseek. Both companies are of the opinion that heavy AI investments are needed to support the growing demand for AI applications, thanks to the possible arrival of more efficient models as demonstrated by Deepseek. Dutch semiconductor equipment giant ASML suggested something similar after the company witnessed a solid growth in orders and received many more bookings than Wall Street expected.
All this suggests that the AI spending environment can remain robust, and that could help Nvidia to deliver solid results and guidance later this month.
Analysts currently expect that NVIDIA’s turnover in the tax 2026 (which has just started) will increase by 52% to just over $ 196 billion, followed by an increase of 21% in tax 2027.
However, expect that those estimates go higher in the light of the above discussion, release the road for more upside down in Nvidia shares. It is worth noting that Nvidia’s 12-month price target of $ 175, according to 66 analysts who cover the share, points to 46% profits of the current levels.
The income estimates of NVIDIA for both tax 2026 and 2027 have risen higher lately, a trend that could continue thanks to continuous investments in AI. As a result, the price target of Nvidia could also witness upward revisions.
So investors on the sidelines and wonder if it is a good idea to buy Nvidia shares after the stellar return that the shares have yielded in recent years can consider buying it immediately, because it can be his mojo regain. The forward profit of the share is very attractive, given that the technology is loaded Nasdaq-100 Index has a forward income several of 27. That is why buying Nvidia can currently turn out to be a smart move, because the momentum of healthy profit growth will probably continue.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and Sister of Meta Platforms CEO Mark Zuckerberg, is a member of the Motley Fool’s Board of Directors. Hard chauhan has no position in one of the aforementioned shares. De Motley Fool has positions and recommends ASML, Apple, Meta Platforms, Microsoft, Nvidia and Oracle. The Motley Fool recommends the following options: Lang January 2026 $ 395 calls on Microsoft and short January 2026 $ 405 calls on Microsoft. The colorful fool has one disclosure policy.
