Nvidia has been moving through rough waters following the unveiling of DeepSeek and uncertainty over Trump’s tariffs. The stock is down about 20% as a result of these market headwinds.
DeepSeek is worrying for investors of Nvidia as they are worried that demand for the highest quality chips would decrease because of the usage of less advanced Nvidia chips used to train the DeepSeek model. This worry is exacerbated by the prospect of a looming trade war – potentially affecting the ability for Nvidia to distribute its chips globally. For example, the 10% tariff on China would be detrimental considering that it accounted for $146bn of electronic imports last year.
The saleoff has pulled Nvidia’s share price below the perfect price that investors have set for it. Even then, its stocks are still priced at ridiculous valuations: its PE ratio sits at 46. Nvidia’s rate of growth is likely going to begin slowing down as purchases of its Blackwell chips begin to decrease. Whilst Nvidia is likely to release strong Q4 earnings on Feb 24, I think it is a good idea to hold on for a bit longer before buying shares.
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