Nvidia will grow despite trade wars, DeepSeek: Bank of America

Ahead of the release of Nvidia’s fourth quarter earnings on February 26, Bank of America (BofA) analysts maintained their “buy” rating on the technology giant. Analysts highlighted the strong position of the company despite geopolitical tensions and trade wars.

BofA believes that the breakthrough of artificial intelligence startup DeepSeek will not impact the semiconductor giant.

Bank of America analysts expect Nvidia to report a lower gross margin in Q1 2025 due to restrictions in China and the transition to the Blackwell product, Investing.com reported.


According to the report, Nvidia is expected to reassure investors on execution of Blackwell GPUs and signal confidence in 2025-2026. This has the potential to represent a low point in investor sentiment. The forecast for data center sales growth could go above 60 percent year-on-year.

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What Bank of America said

BofA analysts, in a note, highlighted that Nvidia’s strong performance has been driven by derivative model training, infrastructure upgrades, artificial general intelligence (AGI), and increasing AI inference requirements. As per their note, the mix between the drivers could change over time, but the overall performance of the company will be positive.

The note carried an example of Nvidia’s processors and data center sales from CY18-24, stating that the growth in one sector did not impede progress in another.

DeepSeek concerns allayed

The note may calm investors after DeepSeek’s open source AI model led to turbulence in the markets.

On January 27, Nvidia recorded its biggest single-day market value loss in the American stock market, with $600 billion being wiped out, as per CNBC. The shares of the semiconductor company had tumbled after DeepSeek’s latest AI model made its debut.

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Nvidia CEO on quantum computing

In January, Nvidia CEO Jensen Huang predicted that practical quantum computing was 15-30 years away. This was met with skepticism by Meta head Mark Zuckerberg. Microsoft founder Bill Gates added his own take on the matter, saying that logical quantum computing qubits may be developed in three to five years, but the process could be longer.

FAQs:

When will Nvidia reveal its Q4 earnings?
The technology giant will reveal the data on February 26 at approximately 1:20 PM PT.

Will tensions with China affect Nvidia’s growth?
The Bank of America expects that any negative impact from China will be countered by strong demand from Western markets.