Nvidia Indicates Robust AI Chip Demand Amid DeepSeek Challenge | Money News
Nvidia has indicated that demand for its premier chips remains strong among major players in artificial intelligence (AI), despite the competitive pricing challenge from Chinese competitor DeepSeek.
The top AI chip manufacturer anticipated continued growth in Blackwell sales following its latest earnings report, which surpassed market forecasts.
Nvidia projected revenue of approximately $43bn (£34bn) for its upcoming first quarter, after reporting $39.3bn (£31bn) in the last three months—an increase of 12% from the previous quarter and a remarkable 78% year-on-year growth.
Just a month ago, its shares faced significant losses when it was revealed that DeepSeek‘s key chatbot, powered by lower-cost chips, had surged to become the top free application on Apple’s App Store in the US.
Nvidia’s shares saw a drop of nearly $600bn in market value within a day.
This situation raised concerns among investors about the sustainability of the recent AI-driven stock market surge.
Leading up to Nvidia’s earnings announcement, there was market anxiety, although shares only fell slightly in after-hours trading.
Market analysts indicated that demand from tech giants like Microsoft and Amazon, who are racing to enhance AI infrastructure, remains strong, as evidenced by Nvidia’s revenue forecasts, predominantly driven by data center sales.
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Read more: What is DeepSeek?
Nvidia’s founder Jensen Huang mentioned that the company has significantly increased the large-scale production of Blackwell, generating “billions of dollars in sales in its first quarter.”
Sales figures were reported at $11bn.
“The demand for Blackwell is incredible, as reasoning AI introduces an additional scaling law—more compute for training enhances model intelligence and more compute for extended reasoning refines the responses,” he continued.
“AI is evolving rapidly as agentic AI and physical AI pave the way for the next wave of advancements that could transform the largest industries.”
Derren Nathan, head of equity research at Hargreaves Lansdown, commented on the report: “The long-term investment outlook for the AI leaders remains strong, especially with Meta’s recent $200bn investment in data centers as a prime example.”
“While growth may be moderating slightly due to scale, analysts’ full-year estimates are likely to be revised upward following today’s results. With a valuation around 30x forward earnings, it still doesn’t appear overstated.”
