Source: Laika Think Tank

In the early morning of February 27, Beijing time, the highly anticipated global "AI leader" Nvidia announced its results for the fourth quarter of fiscal year 2025 (November 1, 2024 to January 31, 2025).

The overall data of this data exceeded market expectations, and although the revenue growth rate slowed down, it still hit a new high. Specifically, Nvidia's Q4 revenue increased by 78% year-on-year to US$39.331 billion, and analysts expected to be US$38.05 billion; of which data center revenue was US$35.58 billion, a year-on-year increase of 93.32%. Q4 net profit was US$22.066 billion, up 72% year-on-year, corresponding to net profit per share of US$0.89, and analysts expect it to be US$0.84.

Although this is a financial report that exceeds expectations, its growth rate has dropped to double-digits for the first time in the past six quarters, and Nvidia's growth curve may slow. On the day after the financial report was released, Nvidia's stock price fluctuated slightly and finally closed red, but in the second trading day, it ushered in the second largest single-day decline since the impact of DeepSeek, and the stock price finally closed down $11.13, a drop of as high as 8.48%.

Although Nvidia is a company founded in the United States and listed on the US stock market, Nvidia's financial report has touched the hearts of investors around the world. Why is Nvidia's financial report so eye-catching? The main reasons are: 1. Nvidia performed well in the past few years

For an ordinary consumer, Nvidia's existence may be the first choice of graphics card brand when buying a computer. But in fact, as a global AI leader, Nvidia's core business games currently only account for a small part of its revenue, and more revenue comes from the unlimited demand for computing power of global technology companies.

This financial report shows that the data center department is Nvidia's largest source of revenue to date, with sales of US$35.6 billion. That exceeded the average estimate of $34.1 billion. Game-related sales—once Nvidia’s core business—came $2.5 billion, with analysts’ average estimate of $3.02 billion. The revenue of the automotive business was US$570 million.

In the past few years, Nvidia has benefited from the development of global AI technology and has seen a significant increase in demand for GPUs, with outstanding performance growth and even data can be described as "terrifying". To give a simple example, Nvidia's revenue in 2022 was US$26.974 billion and its profit was US$4.368 billion; by 2023, its revenue and profits were US$60.922 billion and US$29.76 billion respectively, with revenue more than tripled, but its profits increased by more than 7 times. With the previous value so "exaggerated", revenue in 2024 was US$130.497 billion and profit was US$72.88 billion, which are more than twice the previous value.

If we look at it in quarterly terms, Nvidia's financial report is notIt is often worthy of investors' expectations. For example, the Q4 quarterly financial report released this time had revenue of US$39.331 billion, which is even more than the whole year of 2022, highlighting how fast the company's growth is.

Investors are looking forward to Nvidia's financial report continuing the myth of high growth.

2. Nvidia is directly related to the rise and fall of US stocks

Readers who are familiar with US stocks should understand that in the past two years, the market value of US stocks has been continuously concentrated in several giants, gradually forming the "Magnificent 7", commonly known as the "Seven Sisters" of US stocks (also known as the Seven Biggies of US stocks). Generally speaking, it refers to seven companies, including Apple (AAPL.US), Microsoft (MSFT.US), Amazon (AMZN.US), Google (GOOGL.US), Meta (META.US), Tesla (TSLA.US), and NVDA.US. In December 2024, the total market value of the "Seven Sisters" in the US stock market was about 120 trillion yuan, exceeding the total market value of more than 5,000 companies in the A-share market.

Behind the prosperity of US stocks in recent years, the main reason is that these seven companies have been continuously increasing their stock prices, and other stocks are unlikely to perform in a relatively long-term positive manner. Therefore, these seven companies are particularly attracted by investors around the world.

The importance of Nvidia is reflected in two aspects: 1. A huge valuation (meaning that its stock price may have a significant impact on the entire market, including the blue-chip Dow Jones Industrial Average); 2. A role in the field of artificial intelligence (this field has played an important role in the overall economic growth of the United States. Some people even analyzed that the prosperity of US stocks this year mainly relies on the AI ​​bubble).

In the early stage of DeepSeek's emergence, Nvidia's stock price closed down 16.97% on January 27, and the Nasdaq Index was not spared on the same day. It fell 612 points as of the closing, a drop of more than 3%. Nvidia's market value evaporated by nearly US$590 billion (equivalent to slightly more than 3 AMDs or nearly 18 Cambrians), setting a new record in American financial history. ASIC chip concept stock Broadcom closed down 17.4% on Monday, with its market value evaporated by nearly US$200 billion. Chip foundry TSMC closed down 13.3%, with its market value evaporated by more than US$150 billion. From this performance, we can see the profound impact of Nvidia as the "Seven Sisters" on US stocks.

It is also based on the above reasons that Wall Street and global investors who participate in the US stock market are paying more attention to Nvidia's performance after the emergence of Deepseek. People hope that Nvidia can resist "computing power doubt" and respond to different voices in the market with high growth financial reports.

Although some data in NVIDIA's financial report continues to hit new highs, analysts believe that NVIDIA's performance is not impressive enough and they are more concerned about future growth. Last night, Nvidia led the decline in the seven US stock markets. Under the combined effect of these seven companies, the Nasdaq Index also hit its biggest drop since the DeepSeek impact, and finally closed down 2.78%.

3. Whether DeepSeek shakes Nvidia's status?

Above mentioned that in the early stage of its appearance, DeepSeek once caused Nvidia's stock to fall into a "pitfall". Compared with Nvidia's rise of more than 240% and 171% in 2023 and 2024, Nvidia's stock price performance this year is "shocking": Nvidia's stock price at the beginning of 2025 was US$138.88, while the latest closing price after the press conference was US$120.15, and the stock price fell by 13.49% from the highest price on the first day of the year. This performance disappointed many investors.

About why DeepSeek can affect Nvidia, some analysts believe that DeepSeek achieves top model performance under limited hardware resources, reducing its dependence on high-end GPUs, and the low training cost indicates that the demand for AI models to invest in computing power will drop significantly.

The reason why Nvidia's performance has improved by leaps and bounds in recent years is due to the growing demand for high-end GPUs by training AI models. If the success of DeepSeek can prove that computing power is not the most important factor, then it is not good news for Nvidia.

Although Nvidia's stock price responded in a modest way on the day of the financial report, it ushered in the second largest drop this year on the next trading day, which made some investors pessimistic about the future trend.

Although the revenue and profit of NVIDIA's financial report this time hit a new high, some people pointed out that the corresponding time range of the Q4 quarterly financial report is November 1, 2024 to January 31, 2025. At that time, DeepSeek had not yet entered the public's vision, so the impact on NVIDIA's performance has not yet been revealed.

Antonios said that although DeepSeek trained in the "beggar version" method, reducing the market's expectations for Nvidia's high-end GPU, even so, the DeepSeek-V3 and DeepSeek-R1 models are still trained on Nvidia chip cluster represented by H800. In other words, even if DeepSeek reduces costs and increases efficiency, it is carried out under the framework of Nvidia.

Whether it supports or opposes, at least what we can see is that Nvidia is also examining the new challenges brought by DeepSeek, an Oriental AI product.

At the call after the financial report, Nvidia founder and CEO Huang Renxun said, "The inference model will consume 100 times the computing power, while the future inference model will consume more computing power. DeepSeek-R1 has ignited global enthusiasm, which is an excellent innovation. More importantly, it opens up a world-class inference AI model, and almost every AI developer is applying R1." He also mentioned in the meeting that the Nvidia Blackwell chip is specially designed for reasoning, and the current chip isDemand is “exceptionally strong”.

Nvidia Chief Financial Officer Colette Kress predicts that with Blackwell being launched into the market, Nvidia's gross profit margin will recover to around 75% by the end of this year. The adjusted gross profit margin of the indicator in the fourth quarter was 73.5%, a year-on-year decrease of 3.2 percentage points, in line with analyst expectations.

However, it is an unknown whether this high-end chip can participate in AI construction and help Nvidia continue to create new financial report myths. On February 24, Alibaba Group CEO Wu Yongming announced that in the next three years, Alibaba will invest more than 380 billion yuan to build cloud and AI hardware infrastructure, with a total amount exceeding the total in the past decade. This also sets the largest investment record for private enterprises in the field of cloud and AI hardware infrastructure construction.

Although Alibaba alone has invested so much in AI, and Tencent, ByteDance, Baidu and others are also actively launching their own AI construction plans, in the face of increasingly strengthened export controls, although it has had a certain impact on the development of domestic AI in hardware, it also has a negative impact on the sales of Nvidia's high-end chips.

American giants such as Microsoft and Meta are also vigorously launching their grand plans to invest heavily in the field of AI, but the Wall Street AI boom shows signs of cooling. On the one hand, DeepSeek launched a low-cost AI model, affecting market sentiment; on the other hand, some analysts hinted that Microsoft may cancel leases for some data centers, which may cause concerns about AI overcapacity.

Under the dual adverse factors of "export control" and "overcapacity", how long can Nvidia's financial report legend last? Only time can be left to test.

In the AI ​​era when computing power is soaring, Nvidia once again confirmed the dominance of its "chip empire" with its financial report myth, but the emergence of DeepSeek is like a double-edged sword, which not only pierced the market's blind belief in computing power, but also ignited the prairie fire of technological innovation. Behind the financial report figures is not only a carnival of capital, but also a microcosm of the global technological game - when Eastern algorithms challenge the hegemony of Western hardware with the attitude of "reducing costs and increasing efficiency", a revolution about efficiency and cost is quietly brewing. Can Nvidia's Blackwell chip continue to write the legend? How will the company’s trillion-dollar gamble reshape the AI ​​territory? The answer may be hidden in every computing power collision in the future, and the only thing that is certain is: this war without gunpowder will eventually define the winner of the next era.