/Nvidia%20logo%20by%20Konstantin%20Savusia%20via%20Shutterstock.jpg)
Nvidia (NVDA) has dominated the tech scene in recent years, riding high on the artificial intelligence (AI) boom. With its powerful GPUs driving advancements in gaming, data centers, and autonomous tech, the company has become synonymous with innovation. Investors rode the AI wave to unprecedented highs… until DeepSeek changed the game.
A little-known Chinese startup, DeepSeek, unveiled its R1 model, a shockingly efficient AI system trained for just $5.6 million. The impact was seismic and rippled through Wall Street, wiping nearly $1 trillion off U.S. tech stocks. Nvidia bore the brunt, suffering a record loss in market value and marking the largest single-day wipeout in U.S. stock-market history. Investors panicked, questioning the future of high-cost AI development.
Yet Citi analyst Atif Malik remains bullish. He argues that despite DeepSeek’s efficiency, top AI firms will still rely on advanced GPUs. With massive AI infrastructure projects like Stargate in motion, Citi anticipates double-digit upside for NVDA stock.
To that end, should investors trust Citi’s confidence on the AI chip giant and buy the dip, or should they hold back? Let’s find out.
About Nvidia Stock
Founded in 1993 in Santa Clara, Nvidia (NVDA) began as a gaming GPU pioneer but has since transformed into an AI powerhouse with a market capitalization of $3.2 trillion. Dominating 80% of the AI chip market, Nvidia’s CUDA software ecosystem, used by 5.5 million developers, solidifies its market dominance.
Today, Nvidia powers AI across data centers, automotive tech, and enterprise software. Its early investments in AI and machine learning have made it the undisputed leader, reshaping industries and accelerating the semiconductor and AI revolution with groundbreaking innovation.
NVDA stock has ridden the AI revolution to staggering heights, soaring 430.4% over the past three years - dwarfing the S&P 500 Index’s ($SPX) 34.8% climb. In 2024 alone, NVDA rocketed 178.8%, fueled by insatiable demand for its AI-driven GPUs, leaving both the S&P 500 and the iShares Semiconductor ETF (SOXX) in its dust. The rally peaked on Jan. 7, when shares hit a record $153.13, solidifying Nvidia’s AI supremacy.
But euphoria met a brutal reckoning. China’s DeepSeek unveiled an AI model rivaling ChatGPT - allegedly without Nvidia’s most costly chips. The shockwave erased nearly $600 billion in market value from Nvidia and sent NVDA stock down 17% in a single trading session on Jan. 27.
Nvidia Beats Q3 Earnings Forecasts
Nvidia’s Q3 2025 earnings, released on Nov. 20, were nothing short of staggering. Revenue surged 94% year-over-year to $35.1 billion, with its data center division soaring 112% to $30.8 billion. Gaming climbed 15%, Professional Visualization rose 17%, and Automotive and Robotics roared 72%, showcasing Nvidia’s command across multiple verticals. Adjusted earnings skyrocketed 103% to $0.81 per share, reinforcing its financial might.
CFO Colette Kress emphasized AI’s transformative role, predicting Nvidia AI Enterprise revenue will double in fiscal 2025. Meanwhile, the upcoming Blackwell chips have tech titans like Dell (DELL), Oracle (ORCL), and Google lining up, with demand expected to outstrip supply well into 2026. As Blackwell production ramps in Q4, Nvidia forecasts revenue hitting $37.5 billion.
Nvidia’s Q4 earnings result is set to be released on Feb. 26, and analysts expect EPS to jump 61.2% year over year to $0.79, with revenue projected at $38.13 billion – slightly nudging past Nvidia’s own guidance. Fiscal 2025 EPS is anticipated to soar 134.8% to $2.77. Looking further ahead, the bottom line is projected to rise another 43.7% surge to $3.98 per share in fiscal 2026.
Wall Street Gets Bullish on NVDA Stock Despite Recent Dips
Despite the recent dip in NVDA stock following the announcement of DeepSeek’s R1 model, Citi’s Atif Malik maintains a bullish outlook. Citi reaffirmed a “Buy” rating on NVDA with a price target of $175, implying 35.7% upside. The analyst expressed skepticism about DeepSeek’s claims, suggesting that advanced GPUs, likely Nvidia’s own, were crucial in optimizing the model.
Citi also argues that U.S. access to cutting-edge chips still puts Nvidia in the driver’s seat. Despite the competition, AI giants will likely stick with high-performance GPUs. The firm points to rising AI capital expenditure - like Stargate - as a clear signal that demand for advanced GPUs is far from waning. Nvidia’s strong market position, combined with its solid financials and robust cash flows, keeps it ahead of the curve. For now, Citi sees Nvidia as a strong, long-term investment in the ever-expanding AI landscape.
Analysts are highly bullish on NVDA, with a solid “Strong Buy” consensus rating overall. Out of the 43 analysts in coverage, 36 recommend a “Strong Buy,” three advise a “Moderate Buy,” and four analysts maintain a “Hold” rating.
The mean price target of $176.90 suggests upside potential of 37.1% from the current price levels. The Street-high target of $220 implies that NVDA could rally as much as 70.6%.
