Nvidia Faces AI Chip Demand Concerns Amid DeepSeek Competition - February 24, 2025

Nvidia's AI chip demand is under scrutiny as DeepSeek's cost-effective AI models challenge the need for expensive hardware. DeepSeek's January launch of a free AI assistant, requiring fewer resources, has raised concerns about Nvidia's competitive edge. This event led to a $593 billion market value loss for Nvidia. Investors are focused on whether Nvidia can maintain its growth, with Q4 revenue expected to increase by 72% to $38.05 billion, the slowest in seven quarters. The company anticipates a 60% revenue increase for Q1. Despite this, major clients like Microsoft and Meta continue to invest heavily in data centers, supporting Nvidia's short-term demand. Analysts predict a drop in Nvidia's adjusted gross margin to 73.5% in Q4.