Dan Analyst Ives Views Nvidia's Sell-Off as a "Precious" Buying Chance; Here's Why I Agree with His Perspective
Investing in the stock market can be nerve-wracking, and no one likes losing money. It's common for investors to sell stocks too quickly, often driven by emotions, especially when faced with perceived problems. Right now, Nvidia (NVDA 0.46%) is a hot topic due to its recent 16% crash on January 27, which wiped out around $500 billion of market capitalization.
The sell-off is linked to DeepSeek, a Chinese AI startup that developed a large language model (LLM) using Nvidia's older A100 and H800 GPUs. While this can be seen as a positive, showcasing Nvidia's hardware's role in cutting-edge AI applications, it also raises concerns if DeepSeek can deliver powerful AI capabilities using cheaper, less sophisticated infrastructure.
Tech companies might start questioning the need for Nvidia's most expensive GPUs, like the H100 and Blackwell architecture, leading investors to panic. However, Dan Ives of Wedbush Securities, an Nvidia bull, sees this as an opportunity to buy the dip. Tech giants are unlikely to rely on a Chinese AI startup for their infrastructure, and Nvidia is the only company spearheading autonomous, robotics, and broader AI use cases.
But what should we make of DeepSeek? Some analysts argue that it's not a threat to Nvidia's dominance. While it's true that other tech companies, like Microsoft and Meta, are building custom chips, Nvidia remains a significant force in the AI market. Nvidia is not solely focused on its data center operations — it also leads in the gaming industry and plays a crucial role in self-driving car software.
In conclusion, investors should not panic about DeepSeek. While it might slow down Nvidia's GPU business, Nvidia has a broad portfolio and is expected to continue playing a significant role in the AI movement with its upcoming Blackwell and Rubin architectures.
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The recent drop in Nvidia's stock price was primarily due to concerns about the impact of DeepSeek, a Chinese AI startup that claimed to have built a large language model (LLM) using cheaper hardware. While the technology is significant, experts argue that it's not a threat to Nvidia's dominance in the AI market, as its business portfolio goes beyond just data center operations. The company's leadership in gaming and self-driving car software ensures that it remains a critical player in the broader AI movement.
In light of the concerns, some investors might consider selling their Nvidia shares, seeking to avoid potential financial losses.However, savvy investors, like Dan Ives of Wedbush Securities, view this as an opportunity to invest more in Nvidia, as they believe in the company's resilience and its strategic position in the AI market.
