In recent weeks, shares of Nvidia (NVDA+2.87%) have been under pressure due to numerous DeepSeek-related Chinese AI software that have shown training models to be cheaper than previously imagined. This makes investors worried regarding the hardware future-going preference: less Nvidia GPUs maybe or rather application-specific integrated circuits from the likes of Broadcom Inc. (AVGO +4.52%) and Marvell Technology Inc. (MRVL +1.97%).
Yet Lipacis, after discussions with senior AI engineers from major hyperscale cloud providers, expressed strong confidence in Nvidia's competitive position. «The company simply continues to be the preferred platform for hyperscalers' clients, [and their software ecosystem's robustness and its large development community put it] 5-10 years ahead of any competition» he stated.
Further signs of the disadvantage of Nvidia would be the scenario created by DeepSeek, which shows the large-language models are still rapidly evolving, Lipacis added. The said environment is favorable to any flexible and programmable platforms, as this fits Nvidia's chips: training and inferencing were rapidly becoming a focus, so one expert forecasted opps there would be an enormous opportunity for Nvidia as an efficient contender within that sphere.
Over the last-three-months, Nvidia, being down 9%, and all this time, the PHLX Semiconductor Index (SOX +1.46%) has been down 4%.
Also, Lipacis pointed out some recent downside might have been related to worries about Nvidia's new Blackwell chip coming to market. Nevertheless, he emphasized that Nvidia's demand across the board remains higher than its supply. «In the absence of B100 availability, [Nvidia's] current solution, H100 will be purchased instead,» referring to the Blackwell and Hopper series.
A tactical outperform on Nvidia was launched in front of the company's earnings, projected for February 26. Lipacis expects that at that time the company will present «a positive report and outlook.»
«We consider the primary risk to our call to be that a delay in Blackwell could result in a temporary gap in shipments,» he said.
On Monday, Nvidia shares gained almost 3%.