“Loading Deepseek Dip,” says the Top Analyst for NVIDIA stocks

Nvidia (Nasdaq: NVDA)) The shares took a sharp blow during the Monday session, falling as part of a broader sale in Ai Stocks. The action is immersed ~ 17%, noting its steepest decline in the percentage of one day since March 2020. Moreover, Nvidia saw its market cap shrinking by approximately $ 590 billion, with the biggest decline in value for one Day ever registered.

The seller has been triggered by the entry of the Chinese startup AI Deepseek, which introduced a large language model viewed as a serious contender for Openai and Meta platforms. At the end of December, Deepseek introduced an open source model, developed in just two months for less than $ 6 million, a part of the investment made by its western rivals. Most recently, the company introduced a model for reasoning, which, according to reports, outperforms the latest Openai rating in numerous third-party estimates.

But why was nvidia hit so hard? The answer is the consequences for its main business: Depepeek’s ability to develop modern AI models at some of the cost suggests that companies may not need to invest strongly in NVIDIA’s expensive graphics processors to achieve such breakthroughs.

However, such fears of “peak costs for graphic processors” are completely wrong, says Cantor CJ Muse analyst, which ranks among the top 2% of Wall Street Stock professionals.

“We believe that this opinion is the most distant from the truth and that the announcement is actually a lot of bulls with AGI (artificial general intelligence) at first glance closer to the reality and paradox of Jevons (What happens when improved efficiency actually increases demand that leads to faster use of resources) It almost certainly leads to the AI ​​industry, which wants more calculation, no less, “Muse said.

The muse believes that Deepseek’s success emphasizes the “high efficiency” of open source models, such as those built on Pytorch and Llama. However, the analyst has some doubts about the claim that this model costs only $ 5.57 million compared to $ 500 million to Llama 3.1. In addition, some reports suggest that Deepseek may use a 50K bunker graphics processors instead of the requested 10K A100S, which is strange given the “GPU embargo”. Finally, Muse notes that it is clear that Depepeek made “interesting jumps” in optimizing training methods, which led to a better performance against other LLMs.

In the end, the muse believes that Deepseek’s progress brings us closer to AGI. Progress will continue to be achieved in fields such as pre -training in fields such as preliminary training, after training and time -based conclusions, and future investments in large -scale clusters will be accelerated. “It’s all a bullish for AI,” says Muse.

All this innovation reduces the cost of adoption and makes AI wider widespread, thus supporting the Jevons paradox. “We see this progress as a sign that demand for more calculations will continue to grow over time rather than shrink,” the analyst summarized.

As such, Muse’s tips for investors are to borrow weakness shares. It assigns an overweight rating (ie buying) of NVDA shares, with a price price of $ 200 – which implies a potential 69% up over the next 12 months. (See NVDA shares forecast))

Most muse colleagues agree to his position; Based on a combination of 36 buys against 3 detainees, the view of consensus is that NVDA is a strong purchase. The average target price is $ 177.56, which means that the shares will win ~ 50% next year. (See NVIDIA shares forecast))

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Cancellation: The opinions expressed in this article are only those of the analyzer presented. The content is intended to be used only for information purposes. It is very important to do your own analysis before making an investment.