From Nasdaq: 2025-02-13 09:49:00

In late 2022, ChatGPT shook up the AI industry, sparking a race among companies in the trillion-dollar market. DeepSeek, a Chinese tech company, introduced DeepSeek-R1 to compete with ChatGPT-4 and other large language models. This move caused Nvidia’s stock to drop over 20%, raising concerns about GPU demand.

DeepSeek claims to have trained its model with just $6 million and 2,000 Nvidia GPUs, a fraction of what competitors use. However, industry experts estimate the actual cost at $1.6 billion with 50,000 GPUs. Despite the uncertainty surrounding DeepSeek’s claims, tech giants like Alphabet and Amazon are ramping up capital expenditures, including spending on GPUs.

Nvidia has had a stellar fiscal year, with sales reaching $91 billion through three quarters and a 67% operating margin. The recent drop in Nvidia’s stock price presents a buying opportunity for long-term investors, as the forward P/E ratio has decreased, making the stock more attractive. This dip in valuation has historically been a good time to buy Nvidia stock.

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Read more at Nasdaq: Is DeepSeek’s Breakthrough Really a Disaster For Nvidia Stock?