Analysts have completely backed Nvidia Corporation (NVDA) as Chinese AI start-up DeepSeek shook up the tech giants in Silicon Valley on Monday. The market’s concerns over DeepSeek’s development of advanced AI with cheaper chips led to Nvidia’s market value plunging by $589 billion. However, analysts remain confident in strong demand for Nvidia’s AI processors, with NVDA stock earning five Buy ratings yesterday.
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As DeepSeek’s developments progress, it will be interesting to see how industry leaders like Nvidia will adapt to this evolving landscape.
Nvidia Gains Analyst Support
After Nvidia’s stock declined by nearly 17% on Monday, leading analysts have reassessed their outlook.
Five-star-rated analyst Timothy Arcuri at UBS reiterated his Buy rating on NVDA stock, predicting an upside of 56%. Arcuri maintains his confidence in Nvidia’s ability to report solid results for fiscal Q4 and provide strong guidance for the next fiscal quarter. The company will announce its Q4 FY25 results on February 26. He also believes investors’ worries about a potential short-term slowdown are exaggerated.
Meanwhile, Citi analysts believe that Nvidia’s market dominance is secure, arguing that the development of more efficient large language models (LLMs) will lead to higher demand for advanced graphic processing units (GPUs).
Overall, analysts agree that DeepSeek’s advancements are expected to fuel investments in large-scale computing infrastructure and benefit the broader AI industry. Nonetheless, they have also expressed skepticism about the reported cost of developing DeepSeek’s model, which appears much lower than anticipated. They speculate that the true cost might be higher and that DeepSeek could have used more advanced GPUs than initially disclosed.
Are Nvidia Shares a Good Buy?
On TipRanks, NVDA stock holds a consensus Strong Buy rating from 39 Wall Street analysts, including 36 Buys and three Holds. The average Nvidia share price price target of $177.56 suggests a potential upside of 50% from its current price.
