Nvidia (NVDA) stock was up about 3% in intraday trading Thursday amid optimism about strong demand for its artificial intelligence chips.
The stock, up less than 1% so far this year, has had a difficult start to 2025. Nvidia lost nearly $600 billion in market capitalization in a single day late last month when a low-cost AI model from Chinese start-up DeepSeek shocked Wall Street and raised doubts about future demand for Nvidia’s most advanced (and expensive) chips.
Some analysts were quick to call the DeepSeek sell-off overblown and reiterate their bullish views on Nvidia and other AI stocks. Global shipments of AI servers are expected to grow nearly 30% this year, according to research firm TrendForce. That would be a slowdown from the 46% growth recorded last year, but Nvidia is expected to remain the leader in the space.
Nvidia’s Blackwell Products Expected To Fuel Demand
HP Enterprise (HPE) on Thursday said it had shipped its first Nvidia Blackwell family product, an Nvidia GB200 NVL72. Blackwell, Nvidia’s most sophisticated line of chips, has faced some setbacks but, as the most advanced offering on the market, is expected to be in demand this year.
Morgan Stanley analysts, in a note late Wednesday, argued the market currently underappreciates the value of Nvidia’s offering compared with nascent ASIC—or custom silicon—offerings.
Nvidia chips, they said, generally offer a better cost-performance ratio than custom silicon from the likes of Amazon (AMZN) and Google (GOOG). As such, their base case was that Nvidia would retain its dominant market share.
The greatest risk to the stock, they said, was the possibility DeepSeek would prompt the U.S. to enforce tighter semiconductor export controls.