Nvidia (NASDAQ: NVDA) soared 171% last year and has established itself as a leader in one of today’s highest-growth areas: artificial intelligence (AI). The tech giant not only dominates the AI chip market, but it’s also built an empire of AI products and services that make it the go-to place for any company aiming to develop an AI platform.
As a result, Nvidia’s earnings have taken off, driven by its data center business — the unit that serves AI customers. In the most recent quarter, revenue reached a record of more than $35 billion. That’s more than the company generated annually just a couple of years ago.
All this success has been great for Nvidia and its shareholders. Now, though, investors wonder if the momentum will continue. For example, news last month from Chinese AI company DeepSeek prompted concerns about demand for Nvidia’s most expensive AI chips. But in spite of this and any other concerns, two points in particular could make Nvidia a no-brainer buy in February.
“Staggering” demand for Nvidia’s Blackwell
So first, let’s consider the Nvidia story so far. The company designs and sells the world’s most powerful graphics processing units (GPUs), or chips used for crucial AI tasks like the training and inferencing of models. Big tech companies from Meta Platforms to Amazon are customers, and demand for Nvidia’s latest chip architecture — Blackwell — has been “staggering.”
Blackwell is launching now, and Nvidia expects several billions of dollars in Blackwell revenue in the fourth quarter that ended at the close of January. So, the product is expected to be a smashing success right out of the gate.
The recent news that caused Nvidia stock to stumble suggested U.S. tech companies are spending too much on AI — and could be doing the same job with a smaller investment. Startup DeepSeek said it trained its model in just two months and for less than $6 million. This compares to the billions of dollars U.S. companies have invested — and a lot of that has gone toward Nvidia’s top chips and related products.
But I think the market was too quick to jump to conclusions. Whether DeepSeek really completed training for that amount or not, Nvidia’s highest-performance GPUs still have proven they are more efficient than the company’s older GPUs — and even other rival chips on the market today. And since speed and efficiency is the name of the game, it’s unlikely Nvidia’s customers will change their strategies and abandon the latest innovations.
