A year ago, chipmaker Nvidia (NVDA) was really riding high. Sales of its chips were jumping as it transformed itself from a maker of computer chips used for computer gaming into something much more profound:
It had become ground zero for artificial intelligence.
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The shares were soaring. CBS 60 Minutes produced a segment on the company and co-founder Jensen Huang.
In June, Nvidia split its stock ten-for-one and was added to the Dow Jones Industrial Average.
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Artificial intelligence quickly became part of contemporary vernacular.
At least three times in 2024 and this year, Nvidia was the most valuable company in the world.
A year later, the fever has broken. The shares are just about flat so far in 2025 at $134.43 after a 171% gain in 2024.
Nvidia, however, still has a market capitalization of about $3.3 trillion and is still the second-most valuable company in the world — behind Apple (AAPL) and ahead of Microsoft (MSFT) . And tensions are building inside and outside Nvidia toward the release of its fourth-quarter earnings after Wednesday’s close.
The stakes are huge for Nvidia, for Jensen Huang and, indeed, for all the players in artificial intelligence, especially Microsoft, Facebook-parent Meta Platforms (META) , Amazon.com (AMZN) and Google-parent (GOOGL) . The four are fast-developing AI applications.
Because there’s a new worry: Competition is growing rapidly not just from competitors in Silicon Valley but now from at least one player in China, DeepSeek.
DeepSeek claimed on Jan. 27 it can build large language model technologies that aim to compete against ChatGPT, Google’s Gemini, Anthropic’s Claude and, yes, because he’s everywhere, Elon Musk’s Grok. What sets DeepSeek apart is its claims can build an AI system for much less than Nvidia and others, using lower-powered chips not subject to U.S. export controls.
Nvidia shares plunged 17% that day and had recovered most of those losses by Feb. 20. And then came Friday’s slump.
So, Nvidia has to show it’s still got game by at least these measures.
Its Blackwell graphical processing units, the ultra-fast processors it introduced last year, can be delivered at scale and can continue to be dominant.Its technology has to be strong enough to continue to command a premium price from Nvidia customers, who may have to wait a year to get their order orders filled. It has to scale up production to be able to deliver product more quickly to maintain its market dominance.It has to offer investors enough guidance that the current price target of $172.22 is achievable. The target would translate into a 28.1% gain from Friday’s close.
Here’s a quick look at how Nvidia’s numbers may shake out on Wednesday.
Quarterly earnings estimate: 85 cents a share, up 60% from a year ago.
Quarterly revenue estimate: $38.2 billion, up 72.6% from a year ago.
Full-year earnings estimate: $2.95 a share, up 127% from a year ago
Full-year revenue estimate: $129.3 billion, up 112%.
This brings us back to the DeepSeek issue.
Artificial intelligence’s selling point is this:
If you join cutting-edge processing speed and capacity with fantastic amounts of data, a user can ask an AI computer a question and promptly get back an answer that takes into account all the data the machine already has stored in it.
The intellectual jump may be as profound as when space scientists realized computers could solve complex engineering problems faster than slide rules.
At the heart of the computations are the chips, whether Nvidia’s or someone else’s.
Jensen Huang, Nvidia co-founder and CEO, speaks about the company’s Blackwell capabilities during January 2025’s CES event in Las Vegas,
Salesforce and Dell will offer more snapshots of AI
Nvidia is not the only company reporting results next week. And it is likely that markets will be jittery after sizable losses on Thursday and Friday.
The Standard & Poor’s 500 Index fell 1.6% for the week. The Dow Jones Industrial Average dropped 2.6%, thanks in part to a 749-point on Friday. The Nasdaq Composite Index slid 2.5%.
A immediate catalyst was a drop of nearly 10% in the University of Michigan’s widely watched consumer sentiment index. The key worries: fears of more inflation, tariff worries and uncertainty caused by the Trump Administration massive cost-and-job cutting.
Among the big reports coming is Salesforce (CRM) . It reports at just about the same time as Nvidia on Wednesday, and it is already a big user of artificial intelligence applications in its business.
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The fiscal third-quarter earnings estimate is $2.61 a share, up nearly 14% from a year ago. Sales are projected at $10 billion, up 8.1% from a year ago.
Dell Technologies (DELL) reports after Thursday’s close. It has evolved into a major supplier of high-end servers used in AI. The earnings estimate for the fourth quarter is $2.51 a share, up 14% from a year ago. Revenue of $24.5 billion would be up 9.9%.
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Home Depot, Lowe’s and TJX set to report
Also reporting: Home Depot (HD) , Tuesday morning. Estimate is $3.04 for the fourth quarter. Sales are projected at $38.7 billion, up 11.7%. Shares are down 1% this year. Lowe’s Companies (LOW) , Wednesday morning. Estimate for the Home Depot competitor is $1.84 for the fourth quarter, up 4%. The sales estimate is $18.3 billion, down are projected at $38.7 billion, down 1.7%. Shares are down 3.1% this year. TJX Companies (TJX) , operator of the TJ Maxx chain, Wednesday morning. Estimate is $1.16, down from $1.22 a year ago. The sales estimate is $16.2 billion, down 1.1% from a year ago.
With these three, watch for how the companies describe their customers’ outlooks. Walmart (WMT) last week helped off last week’s stock slump when it offered lower than-expected guidance for the current quarter.
“Wallets are still stretched,” CFO John David Rainey told the Wall Street Journal.
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