Nvidia Q4 Earnings Preview: Can DeepSeek Disrupt the AI Chip Giant’s Momentum?
Introduction
Nvidia Q4 Earnings Preview : Nvidia Corporation, the undisputed leader in artificial intelligence (AI) chip manufacturing, is set to announce its fourth-quarter earnings on Wednesday, February 26, 2025, after U.S. market hours. The company, a key player in the elite “Magnificent Seven” group, has played a crucial role in driving the S&P 500 to record highs. However, a new challenge has emerged in the form of Chinese AI startup DeepSeek, which has introduced cost-effective AI models, raising concerns about Nvidia’s long-term dominance.
Wall Street’s Expectations: A Blockbuster Quarter?
Despite concerns over competition, Nvidia’s financials are expected to showcase another quarter of phenomenal growth. Wall Street analysts anticipate:
| Financial Metric | Q4 FY2024 | Q4 FY2025 (Projected) | Year-over-Year Growth |
|---|---|---|---|
| Revenue | $20 billion | $38.08 billion | 90% |
| Net Income | $12.25 billion | $19.58 billion | 60% |
| Adjusted EPS | 53 cents | 85 cents | 60% |
With projected revenue nearing $40 billion, Nvidia continues to benefit from surging demand for AI chips, used in data centers, cloud computing, and advanced AI applications.
DeepSeek’s Challenge: A Real Threat or Temporary Hurdle?
In January 2025, Chinese AI firm DeepSeek introduced a large language model (LLM) capable of competing with ChatGPT. What sent shockwaves through Silicon Valley was DeepSeek’s ability to train its model at a fraction of the cost, potentially reducing demand for Nvidia’s high-end chips. The news wiped out $595 billion from Nvidia’s market capitalization in a single trading session.
Despite the temporary setback, Nvidia CEO Jensen Huang praised DeepSeek’s innovation, calling it “an excellent AI advancement that leverages widely available models while complying with export controls.” This highlights Nvidia’s confidence in its stronghold over the AI chip market, at least for now.
Nvidia’s Market Dominance: A Trillion-Dollar Powerhouse
Nvidia’s staggering valuation of over $3 trillion makes it the second-largest publicly traded company, behind only Apple. Its influence extends beyond AI, impacting the entire U.S. stock market. In 2024 alone, Nvidia accounted for more than 20% of the S&P 500’s total returns.
The “Magnificent Seven” (Apple, Microsoft, Alphabet, Amazon, Tesla, Nvidia, and Meta) have driven most of the S&P 500’s gains in recent years. However, in 2025, this momentum has slowed. While the index has gained 4%, the Magnificent Seven’s collective contribution has been minimal, weighed down by losses in Tesla, Microsoft, and Alphabet.
Investor Sentiment and Stock Performance
Ahead of the earnings release, Nvidia’s stock has seen volatility, dipping 2% on Tuesday. This decline also dragged down the Philadelphia Semiconductor Index by 2.1%, reflecting broader market concerns over AI competition. However, analysts remain bullish, citing Nvidia’s upcoming Blackwell GPU, expected to launch later this year, as a potential catalyst for renewed growth.
Conclusion: Will Nvidia Deliver Another Blowout Quarter?
As Nvidia unveils its fourth-quarter earnings, investors will be watching closely to see whether its AI dominance remains unchallenged. While DeepSeek has introduced new uncertainties, Nvidia’s strong financials, cutting-edge chip technology, and deep industry ties make it a force to be reckoned with.
If the numbers meet or exceed expectations, Nvidia could cement its position as the undisputed AI leader, sending its stock soaring once again. However, if concerns about AI competition persist, the market may react with caution. Either way, today’s earnings report will be a defining moment for both Nvidia and the broader AI industry.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.