Nvidia ‘s strong earnings and guidance in its latest quarter that were reported late Wednesday didn’t stop one Wall Street analyst from downgrading the stock, citing the potential impact from Chinese chatbot DeepSeek. Summit Insights Group’s KinNgai Chan downgraded Nvidia to hold from a buy rating on concern that less computing power may be needed for developing large language models. “We believe risk-reward is no longer favorable for the stock due to persistent high whispers numbers and rumor of entry into the PC Client MPU market,” Chan said, referring to memory protection units. “While we think the datacenter capex growth for the training market will continue to benefit NVDA, we believe the lower computing power requirement for inference while not evident today, will undoubtably have a negative impact to NVDA’s financial performance in the medium- to longer-term,” Chan added. Revenue continues to surge at Nvidia as the company rides the AI boom with its data center graphics processing units , or GPUs, which comprise the vast majority of the market for AI accelerators. Nvidia’s revenue in the quarter ended in January rose 78%, and full fiscal-year revenue soared 114% to $130.5 billion. Chinese AI startup DeepSeek has stood out by requiring significantly less computing power compared to other large language models. In late January, DeepSeek said its V3 model required less than $6 million worth of computing power from Nvidia H800 chips.
