Why Ride a Rollercoaster When You Can Hold NVIDIA Stock?

NVIDIA (NVDA) has been on a wild ride, but unlike a rollercoaster, this one has serious profit potential. 

Investing Is Like Riding A Rollercoaster, And It Shouldn't Be Any Other Way | FedSmith.com

Recent developments—including tariffs, China’s DeepSeek AI, and Alibaba’s AI push—have sent shockwaves through the market. Let’s break down what’s happening and why NVIDIA remains a key player in the AI race.


Impact of Recent Tariffs

The reintroduction of tariffs by the U.S. administration has created ripples across the technology sector. Although NVIDIA's direct exposure to China is relatively limited, the broader market sentiment has been affected. The tariffs have led to a sell-off in industries that facilitate and benefit from the AI boom, indirectly impacting companies like NVIDIA. 


Emergence of DeepSeek AI

Chinese startup DeepSeek has unveiled an AI model that has garnered significant attention. This development coincided with a substantial decline in NVIDIA's market value, raising concerns about potential shifts in the AI landscape. However, NVIDIA's strong partnerships with major tech companies, such as Amazon and Alphabet, have helped mitigate these concerns. Amazon's CEO, Andy Jassy, reaffirmed the company's deep partnership with NVIDIA, underscoring NVIDIA's integral role in AI infrastructure. 


Alibaba's Advancements in AI

Alibaba has introduced a new AI model that it claims outperforms existing models from DeepSeek, OpenAI, and Meta Platforms. This development highlights the rapid advancements in AI within China. While Alibaba's progress signifies increased competition, it also presents potential collaboration opportunities for NVIDIA, given its expertise in AI hardware. 


Conclusion

NVIDIA remains a pivotal player in the AI sector, supported by substantial investments from major tech companies in AI infrastructure. Despite challenges posed by geopolitical factors and emerging competitors, NVIDIA's strategic partnerships and technological prowess position it well to navigate the evolving landscape.


Source: 

GreenGreenberg, K. (2025, January 29). Alibaba Rolls Out AI Model It Says Can Outperform DeepSeek's and OpenAI's. Investopedia. https://www.investopedia.com/alibaba-rolls-out-ai-model-it-says-can-outperform-deepseek-and-openai-8782354

Kawa, Kawa, L. (2025, February 3). Nvidia’s low exposure to China doesn’t matter as traders dump the stock anyway. Sherwood News. https://sherwood.news/markets/nvidia-low-exposure-china-stock-selloff

Comments

  1. pohchai9 February 2025 at 18:41

    A more in-depth analysis will be helpful. For example, the likely impact on top and bottom lines. In addition, show some numbers and charts.

    ReplyDelete

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