Nvidia is set to report its fourth-quarter earnings on Wednesday, and all eyes are on the company as it faces a critical test. As the second-largest company in the world, Nvidia has a lot to prove to its investors. The key focus will be on whether the demand for its cutting-edge Blackwell chip remains strong and how the company is handling the unexpected debut of China’s DeepSeek AI model. Last month, DeepSeek’s arrival sparked concerns among investors, as its advanced AI model suggested that data centers might not need as much computing power as previously thought. This could potentially lead to reduced GPU sales for Nvidia. However, Nvidia’s CEO, Jensen Huang, has countered these concerns by arguing that DeepSeek’s efficiency improvements will actually accelerate the adoption and advancement of AI, which would ultimately benefit Nvidia.
Despite these worries, most analysts are optimistic about Nvidia’s earnings report. According to Bloomberg data, the average analyst estimate predicts that Nvidia’s revenue will grow by an impressive 73% to $38.2 billion for the quarter, up from $20 billion in the same period last year. This sturdy growth expectation has set a high bar for the company, but many experts believe Nvidia is well-positioned to clear it. Analysts from Mizuho, for instance, anticipate an “in-line” earnings report but also caution about some “growing pains” in the near term. They point to potential challenges in the first half of the year, particularly with the ramp-up of Blackwell, which has specific power and cooling requirements. However, Mizuho remains confident that the second half of the year will see a strong recovery, driven by increasing demand for Blackwell GPUs from major customers like Microsoft, Amazon, and Alphabet. The firm has even given Nvidia an “Outperform” rating with a $175 price target, reflecting their bullish outlook on the company’s future.
Wedbush analysts have framed the earnings report as a potential “$2 billion beat and $2 billion raise” quarter, a scenario they believe Nvidia can achieve. They highlight the robust performance they expect from the company, driven by the massive demand for Blackwell chips and AI-related capital expenditures. Wedbush also notes that, based on their channel checks, no major AI enterprise has slowed down or altered its deployment plans due to DeepSeek’s emergence. In fact, the firm suggests that customers are eager to maintain their position in line for Nvidia’s next-generation chips, indicating strong and sustained demand for the company’s products.
Bank of America analysts have also weighed in, expressing confidence that Nvidia will surpass analyst estimates. They predict a 60% year-over-year growth in Nvidia’s calendar-year 2025 data center revenue, a staggering figure that underscores the company’s leadership in the AI and GPU markets. Vivek Arya, a Bank of America analyst, emphasized that despite DeepSeek’s supposed “revolutionary” optimizations, there has been no noticeable change in spending intentions among Nvidia’s large customers, including Microsoft and Meta. Arya argues that hardware and software optimizations are an inherent part of computing advancements, and as such, DeepSeek’s efficiencies are unlikely to translate into reduced sales for Nvidia. He also points to the upcoming GTC conference in March as a major catalyst for the company, where investor focus could shift to Nvidia’s next-generation products, such as the Rubin GPU and autonomous robotics solutions. Bank of America has given Nvidia a “Buy” rating with a $190 price target, reflecting their strong confidence in the company’s future prospects.
Looking beyond the earnings report, Bloomberg Intelligence analyst Kunjan Sobhani has noted that Nvidia is likely to meet its fourth-quarter revenue expectations and raise its first-quarter guidance. This expected performance is attributed to the significant ramp-up in Blackwell GPU shipments, which began in the fourth quarter and are set to increase further in the first quarter of 2026. Sobhani also highlighted the recovery in Nvidia’s stock price, which has fully rebounded from the losses incurred after DeepSeek’s debut. This recovery suggests that investor confidence in Nvidia’s ability to navigate potential challenges remains strong. Additionally, Sobhani pointed to increased capital-spending guidance from key customers like Meta, Microsoft, Amazon Web Services, and Google as a positive indicator for near-term sales. Encouragingly, Sobhani expects Nvidia’s profit margins to rebound to the mid-70s in the second half of the year, following a temporary decline caused by the Blackwell production ramp.
In summary, Nvidia’s upcoming earnings report is a pivotal moment for the company, with investors closely monitoring its ability to maintain strong demand for Blackwell chips and mitigate any potential impact from DeepSeek’s AI model. While some analysts have raised concerns about near-term challenges, the overall sentiment on Wall Street is overwhelmingly positive. Most experts expect Nvidia to deliver a strong performance, beat earnings estimates, and raise its guidance. With its leadership in the AI and GPU markets, a robust product pipeline, and strong customer relationships, Nvidia appears well-positioned to continue its growth trajectory and solidify its position as a driving force in the tech industry. The focus now shifts to how the company will address these expectations and outline its vision for the future during its earnings report.
