US LNG exports surge but will buyers in China turn up?
On Monday, Itau BBA reaffirmed its Outperform rating on NVIDIA (NASDAQ:NVDA) shares with a steady price target of $164.00. The semiconductor giant, currently valued at $2.89 trillion, has demonstrated remarkable financial strength with a perfect Piotroski Score of 9 according to InvestingPro data. The confirmation came after a flurry of inquiries over the weekend concerning the potential impact of DeepSeek, a Chinese AI startup, on the AI industry and competitors like OpenAI. DeepSeek recently released a model they claim outperforms GPT-01 at only 3-5% of the cost, sparking discussions among tech commentators.
Thiago Kapulskis from Itau BBA addressed the concerns raised by the articles from the New York Times (NYSE:NYT), Ben Thompson, and Vital Knowledge. In his note, Kapulskis suggested that the semiconductor sector's complexity could lead to a sell-off or rotation out of AI semiconductor stocks, especially among investors not well-versed in technology, despite year-to-date gains of 6.2%. InvestingPro analysis shows NVIDIA's stock has demonstrated significant volatility, though it maintains impressive revenue growth of 152% year-over-year.
However, Kapulskis advised a contrarian strategy, recommending investors to consider adding to their NVIDIA positions should any market weakness present itself. He pointed out that the stock's significant price levels of $100 and $80, corresponding to 20 times the earnings per share (EPS) of $5 and $4 respectively, could represent attractive entry points for NVIDIA shares.
The analyst's stance indicates confidence in NVIDIA's resilience and long-term prospects, despite the emerging competition and the potential volatility in the AI semiconductor market. NVIDIA's stock rating and price target remain unchanged, reflecting Itau BBA's positive outlook on the company's performance.
In other recent news, DeepSeek, the AI-focused company, has been making notable strides with its latest open-source AI model, Janus-Pro-7B. The model, recognized for its multimodal capabilities including image generation, has reportedly outperformed OpenAI's DALL-E 3 and Stable Diffusion in established benchmarks such as GenEval and DPG-Bench. DeepSeek's advancements have stirred the tech sector, leading to significant market fluctuations.
Deepwater Asset Management's Gene Munster suggested that the market's response to DeepSeek's progress could be an overreaction. He pointed out the underestimated growth in AI infrastructure demand and the potential for increased investment in AI infrastructure due to advancements in model training efficiency.
Furthermore, DeepSeek has adjusted its registration process due to the surge in usage of its AI app, now only accepting registrations from users with mainland China mobile (HK:0941) phone numbers. This decision followed a service outage caused by the app's popularity.
Nvidia Corp , a major player in the tech industry, has experienced a significant decrease in its stock-market value due to concerns related to DeepSeek's advancements. This drop in Nvidia's market value is the largest in the company's history, highlighting the influence of investor sentiment about a single startup on a larger, established company's market value.
These developments underscore the swift changes in the AI landscape and the potential implications for tech stocks. As the industry continues to evolve, the focus will be on how companies respond to these advancements and the potential for further market fluctuations.
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