Nvidia’s AI chip demand faces intense scrutiny as the company prepares to report its quarterly results on Wednesday. Investors are increasingly concerned about the impact of China’s DeepSeek, whose low-cost AI models challenge Nvidia’s dominance.
Nvidia, the world’s second most valuable company, has thrived on an AI-driven spending spree by tech giants like Microsoft and Meta. However, DeepSeek’s rise in January wiped $593 billion off Nvidia’s market value — the largest single-day loss for any U.S. firm.
Despite this, Nvidia is expected to report a 72% jump in revenue to $38.05 billion for its fourth quarter, though this marks its slowest growth in seven quarters. Forecasts suggest a 60% revenue rise for the first quarter ending in April.
Big tech companies have shown no signs of cutting AI investments. Meta, Microsoft, Google, and Amazon continue their aggressive data-center spending, reinforcing demand for Nvidia’s AI chips.
Adding to the complexity, Nvidia’s Blackwell chip rollout has boosted revenue but squeezed margins, with adjusted gross margins likely dropping to 73.5%. The shift from selling standalone chips to full AI systems — like the GB200 NVL72 — has made production more costly and time-consuming.
Further challenges came from Nvidia’s manufacturing partner TSMC, which struggled with advanced packaging capacity, and early Blackwell design flaws that have since been resolved.
Investors await Nvidia’s results, hoping the company can maintain its “beat and raise” streak to stabilize its stock and prove its AI chips remain vital in the competitive AI race.
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