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Nvidia reports earnings today, which means more questions about AI being overhyped.
The company's chips are so critical to AI development that its quarterly reports have become a State of the Union-type event for the tech. And in the three months since Nvidia last checked in, one company has shocked the AI industry: DeepSeek.
Business Insider's Emma Cosgrove and Hasan Chowdhury have a rundown on what to expect when Nvidia reports after the bell.
DeepSeek burst onto the scene in late January with reports it could produce high-performance models with fewer and less powerful hardware than its US competitors. And when you're in the business of selling AI chips like Nvidia is, some might view that as not great news.
At least, that was the market's initial reaction. Nvidia lost $600 billion in market capitalization in a single day.
The stock eventually stabilized — and some cloud firms said DeepSeek's AI models ultimately led to an increased demand for Nvidia chips — but it's still been a tough start to 2025 for the tech giant. Nvidia shares are down more than 8% this year compared to the S&P 500, which is up 1.48%.
Nvidia CEO Jensen Huang addressed the DeepSeek stock sell-off (you'll never guess this; he thinks investors got it wrong). Wednesday's earnings will be another chance for Nvidia to calm market nerves and address the ongoing doubt some have about AI: Are we spending too much money on this stuff?
If anyone's well suited to handle the critics, it's the world's second-largest company.
Time and again, Nvidia has answered the bell. Heading into last earnings there were concerns over AI models hitting a performance wall. Huang's response? Demand for Nvidia's new chip was "incredible."
Come to think of it, the biggest threat to Nvidia might be the incredible expectations Wall Street analysts have heaped onto it. Nvidia beat Q2 estimates in August, but its revenue guidance for the third quarter fell just short of the most ambitious predictions, causing its stock to drop. Such is life at the top of the AI kingdom.
Wall Street isn't letting up on the pressure, though. Most analysts expect Nvidia to beat earnings estimates again, and some even expect it to raise its first-quarter guidance on revenue, writes BI's Matthew Fox.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Hallam Bullock, senior editor, in London. Amanda Yen, associate editor, in New York. Elizabeth Casolo, fellow, in Chicago.
