Nvidia has indicated that there is no decline in demand for its top-of-the-line chips among major artificial intelligence (AI) investors, despite facing competition from the low-cost Chinese competitor DeepSeek. The leading AI chip manufacturer stated that it anticipates continued growth in Blackwell sales following its recent earnings surpassing market expectations.
The company’s revenue forecast for the first quarter is approximately $43 billion (£34 billion) after achieving $39.3 billion (£31 billion) in the last three months, marking a 12% increase from the previous quarter and a 78% increase from a year ago. Nvidia faced a setback a month ago when DeepSeek’s primary chatbot, using more affordable chips, became the most popular free application on Apple’s App Store in the US, causing Nvidia’s shares to plummet by nearly $600 billion in market value in a single day.
This development led to concerns among investors about whether the recent AI-driven stock market surge was exaggerated. Despite the apprehension preceding Nvidia’s earnings report, shares only experienced a slight decline in after-hours trading. Market analysts emphasized that demand from tech giants such as Microsoft and Amazon, who are in a race to establish AI infrastructure, remained strong, as evidenced by Nvidia’s revenue guidance, even though a significant portion of it comes from data centers.
Nvidia founder Jensen Huang highlighted the company’s significant increase in the mass-scale production of Blackwell, resulting in «billions of dollars in sales in its first quarter.» He emphasized the remarkable demand for Blackwell, attributing it to the advancement of AI, where increasing computing power for training enhances model intelligence, and computing power for extended thinking enhances the quality of responses. Huang noted that AI is progressing rapidly, with agentic AI and physical AI laying the groundwork for the next wave of AI to revolutionize major industries.
Derren Nathan, head of equity research at Hargreaves Lansdown, commented on the report, stating that the long-term investment prospects for the driving force behind the AI sector appear robust, especially with Meta’s $200 billion investment in data centers being among the latest substantial investments unveiled. Nathan mentioned that despite some slowing growth due to scale, analysts can anticipate upgrades to full-year figures based on the current results. With a forward earnings multiple of around 30x, the valuation still appears reasonable.
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