Probably, there is no stock that is not an example of artificial intelligence (AI) frenzy over the past year than NVIDIA (NVDA 1.71 %)。 The business of a semiconductor chip manufacturer has benefited because high -tech companies spent billions of dollars to purchase AI. NVIDIA’s shares have increased by nearly 90 % in the last 12 months until the end of January.
However, when a Chinese emerging company Deepseek announced on January 27, the NVIDIA shares (LLM) were produced, less than $ 6 million, which was spent by US companies. % Of % have dropped. Since it was recovered, the shares were still below $ 153.13 in 52 weeks, reached on January 7.
Does this create opportunities for purchase? Or is DeepSeek threatening NVIDIA’s future revenue? Read to learn whether NVIDIA remains a long -term investment valuable to AI.
Is the arrival of DeepSeek threatening NVIDIA’s business?
DeepSeek’s AI price tags were surprisingly low, and we were concerned that NVIDIA would lose business. If a company can produce AI technology cheaply, other companies can do it without NVIDIA’s expensive product.
However, the success of emerging companies in China is unlikely to affect NVIDIA in some reasons. You may want to use advanced AI chips with limited Deepseek. The US Ministry of Commerce is investigating the possibilities.
In addition, Chatgpt’s creator Openai accused DeepSeek for creating software by stealing Openai data. AI requires mount data to execute a task, so if DeepSeek uses Openai content inappropriately, it is another reason that others cannot duplicate LLM.
In addition, the United States is in a fight against China due to digital advantage. This has exported a restriction on the sale of AI chips to China. After Deepseek arrives, there is a possibility that more restrictions will come. This makes it difficult for other Chinese companies to develop low -cost LLMs.
Deepseek may be banned for rivals between the United States and China. DeepSeek AI technology is already banned by US Navy and federal government agencies such as NASA.
The United States has passed laws to ban other Chinese companies Tiktok for privacy and security concerns. President Donald Trump has suspended the ban, but it will eventually happen unless the parliament will reversing it or the Tactoku is sold to the US business. Considering how much AI depends on functions, it makes sense to prohibit Deepseek and other Chinese AI companies than ban Tiktok.
The ban on the United States is not the only possibility. Italy banned Deep Shek at the time of this writing. Such actions by other countries will suppress AI competition from China.
Many strengths of NVIDIA
These factors indicate that the recently announced Stargate project, which has been announced by Trump, which seeks up to $ 50 trillion in AI infrastructure investment, progresses as planned. NVIDIA is one of the companies working on projects.
Jensen Huang of NVIDIA CEO met Trump on January 31 and discussed AI’s policy. The level of access and the input of the US AI strategy means that NVIDIA is positioned to make a profit as the policy evolves.
After all, NVIDIA is already considered an outstanding AI chip provider. Its reputation has helped to achieve a record of $ 35.1 billion in the third quarter, which ended on October 27, 2024. This indicates an impressive 94 % increase from a year ago.
In addition to the growth of revenue, the company’s other finances are outstanding, indicating their powerful basic business. In the third quarter, net income $ 19.3 billion increased 109 % since the previous year. In the third quarter, the balance sheet of $ 38.5 billion, $ 38.5 billion, cash equivalent, and investment included $ 96 billion. NVIDIA’s cash storage alone has a larger debt in the third quarter than $ 30 billion.
In addition to this, Blackwell, the latest computing architecture of Chipmaker, is selling well. CFO COLETTE KRESS said in a call for revenue, “We are steadily proceeding to exceeding hundreds of millions of previous blackwell revenue estimates.”
The company is also more than AI company. The chips are used in other industries, including robot engineering, PCs, game consoles, and automobile sector to add more digital functions.
Can I buy or not buy NVIDIA stocks?
Due to the powerful finances and profits of NVIDIA, the popularity of products, and the scope of various applications of their chips, the company is in a position to prosper for many years, and its shares have become an excellent long -term AI investment. Ta. And now it’s a good time to buy stocks.
That is for NVIDIA’s stock evaluation. Let’s look at the ratio of price and revenue (P/E). This indicates how much investor wants to pay for dollar -specific revenue.
YCharts data.
NVIDIA’s P/E multiples are at the low end of the past year at the time of this writing. This indicates that the company’s shares are reasonably priced compared to the past.
Its stock evaluation was added to its powerful business, a good opportunity to scoop the shares of this major AI chip manufacturer prior to the fourth quarter of February 26.
