Nvidia (Nvda -3.67%)) The stock was crushed on January 27, lowering 17% in a single session after a new wave of doubts arrived in the foreground after the profitable artificial intelligence model (AI) unveiled by Deepseek of Chinese start-up.
The assertion of Deepseek according to which formed its R1 model for only $ 6 million And made it competitive enough to operate as well as the most expensive O1 O1 reasoning model of Openai Rattled Investors. Nvidia’s actions have delivered stellar gains in the past two years, as its income and profits have increased considerably thanks to booming demand for its expensive graphics cards which are used for the training and deployment of models of Ia.
Thus, Deepseek’s pretension to do more with less with the new concerns about the potential demand for Nvidia tokens in the future. However, this is not the only factor to weigh on Nvidia’s stock lately. The potential NVIDIA flea export restriction For international destinations and the relative slowdown in expenditure in AI infrastructure are also problems (which have now been exacerbated by the breakthrough of Deepseek).
However, pressing the panic button and selling Nvidia on this news may not be an intelligent decision. After all, there are enough rear winds suggesting that he could again find his Mojo and even reach the $ 200 mark.
IA infrastructure expenses should be massive in 2025
The concerns concerning the slowdown in IA infrastructure expenses seem to have been based on the basis of recent announcements made by the main stakeholders in this space. First of all, Microsoft announced that he was settled on Increase its capital expenses (CAPEX) From 43% during the current financial year to $ 80 billion because it seeks to build more AI data centers.
NOW, Meta-platforms also announced that it would increase its CAPEX 2025 by around 50% compared to the estimated expenses last year. The announcements of these technology giants also accompanied by major development at the White House. Softbank, Openai, OracleAnd the IA investment company based in Abu Dhabi MGX announced that it “would begin to deploy $ 100 billion immediately” for the construction of AI infrastructure in the United States as part of the Stargate project.
Of course, you may be wondering if the low cost of training the Deepseek model will bring Nvidia customers to reduce their expenses on its tokens. It is too early to reach a conclusion, but it is possible that the request for graphics cards from the Nvidia data center is not worked. Indeed, the effectiveness displayed by Deepseek could encourage more companies to create profitable AI models, which means that the demand for calculation is likely to remain solid.
So there is a possibility that AI -centered expenditure by Titans of American technology in 2025 could go higher again. This would open the way to Nvidia to maintain the growth of income and current profits that the company has faced in the past two years.
NVDA Revenue (TTM) data by Ycharts.
A great reason why Nvidia will be the most likely beneficiary of the madness of AI in 2025 is that it continues to dominate the market for graphic processing units (GPU). The company controls around 70% to 95% of the GPU market in the AI data center according to various estimates, although there is a good chance that its share will be at the upper end of this range.
It is because his rivals such as Dmla And Intel barely managed to make a breach on the AI fleas market. AMD is the closest competitor to Nvidia on the GPU market of the AI data center, and its estimated income in 2024 from the sales of these chips is a fraction of the potential NVIDIA income from this space. Things are even worse in Intel, as the company should be lower than its income target for $ 500 million ai for 2024.
Thus, Nvidia is on the track at the angle of most incremental expenses on IA fleas this year. Even better, the doubling of the advanced capacity of paces by the partner of the Nvidia foundry Manufacture of Taiwan semiconductors should ideally allow the first to meet the formidable demand for technology giants. Consequently, there is a good chance that Nvidia’s profits growth during the 2026 fiscal year (which will start shortly and coincide with 11 months of 2025) could be higher than what analysts expect.
This could be the reason why this semiconductor stock could increase to $ 200 this year.
Decode the path to $ 200
NVIDIA shares must jump 55% of current levels to reach $ 200. Consensual estimates provide for a 50% increase in NVIDIA profit during the year 2026 to $ 4.45 per share. The high -level estimate of the street points to a leap of 101% in its results.
However, NVIDIA can beat the average estimate of profits growth for the new financial year on the back of additional expenditure for AI infrastructure and improvements in TSMC capacity. Assuming that he jumped 75% in his results, NVIDIA could declare a profit of $ 5.16 per share during the year 2026. Multiple term gains Out of 40 (in accordance with the average for five years of the company) to the benefits provided for the financial year would be sufficient to help Nvidia’s shares reach $ 200.
In addition, the multiple of term on 40 supposed above is lower than that of the winnings of multiple action. So this IA stock could provide healthy gains even if they are negotiated with a discount in the future.
Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Hack Has no position in the actions mentioned. The Motley Fool has positions and recommends micro advanced, Intel, Meta Platforms, Microsoft, Nvidia, Oracle and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: Long January 2026 $ 395 Calls on Microsoft, short February 2025 27 $ calls Intel and short January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.