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Nvidia: DeepSeek Freakout Unwarranted

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  • Nvidia Corporation faces pressure due to DeepSeek's claims of cheaper AI model training, but efficient GPU usage could boost overall AI spending.
  • DeepSeek's R1 model claims to outperform OpenAI at a fraction of the cost, though its actual GPU usage is under scrutiny.
  • Nvidia's stock drop presents a buying opportunity, with AI demand likely to grow despite potential margin risks.
  • The main stock risk is lower margins, but efficient AI models are unlikely to diminish Nvidia's long-term AI GPU growth story.
Nvidia Corporation (NASDAQ:NVDA) is getting crushed on news of a Chinese AI company figuring out how to reduce GPU costs to train AI models. The AI chip company traded at a rich valuation, and less demand for GPUs could crush the sales growth and reduce the value of the stock. My investment thesis remains Bullish on the stock on any further dips, as more efficient GPU usage could only ramp up AI spending.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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