Nvidia not slowing down! DeepSeek breakthrough set to propel its GPUs to new heights; here's why

Nvidia has come through a fantastic journey this past year, and although it has lost some momentum after Chinese AI startup DeepSeek launched its latest AI model, the near future is brighter for the chipmaker, according to Tiger Brokers market strategist James Ooi.

DeepSeek's impact

While the general perception is that DeepSeek would undermine the demand for Nvidia's high-performance graphical processing units (GPUs), but according to the market strategist, the opposite seems to be the case. He claimed that demand for Nvidia's high-performance GPUs will increase, reported TipRanks.

According to Ooi, DeepSeek's lower computing power needs could open up more AI opportunities, ultimately benefiting Nvidia and other AI-related stocks.

Investor sentiment rebounds

Nvidia's stock took a hit after DeepSeek's debut, but now investor sentiment has started to recover and its stock appears to be on an upward path. Nvidia's stock is up 85.53% over the last year, as per reports.

Rising competition

Yet the problem does not end here as there are still fears of competition. According to TipRanks, AI companies like Microsoft-backed OpenAI are developing their own chips. OpenAI has even finalized the design of its first custom chip.

Wall Street’s strong confidence

According to TipRanks, the consensus rating among Wall Street analysts for Nvidia is Strong Buy, based on 38 buy ratings and three hold ratings assigned in the last three months. The mean price target is set at $178.71, while the high and low targets are $220 and $135, respectively, meaning a potential upside of 33.39% for the stock.

FAQs

What was the main factor that caused Nvidia stock to fall?
Nvidia share prices plunged with the introduction of DeepSeek's latest AI model because investors fretted that this development would lower the demand for Nvidia's most powerful GPUs.

What did James Ooi say about Nvidia's future prospects?
James Ooi, a market strategist for Tiger Brokers, claimed DeepSeek's lower computing power requirements will benefit Nvidia. He laid emphasis on DeepSeek's potential for wider AI applications, which in turn will boost the demand for Nvidia's GPUs.