A year prior, Nvidia, a prominent chipmaker, experienced a significant surge in its online sales as it successfully transitioned from being a manufacturer primarily focused on gaming computer chips to a central figure at the forefront of artificial intelligence.
The company’s shares soared significantly, drawing notable attention, including a feature on CBS’ 60 Minutes with co-founder Jensen Huang. In June, Nvidia executed a ten-for-one stock split and was subsequently incorporated into the Dow Jones Industrial Average.
Artificial intelligence began to integrate deeply into modern lexicon around that time. There were at least three instances in 2024 and 2025 when Nvidia stood as the most valuable company worldwide. Fast forward a year, the company’s momentum has cooled. Currently, its shares are approximately stable at $134.43 in 2025 after appreciating by 171% in 2024.
Nonetheless, Nvidia maintains a formidable market capitalization of roughly $3.3 trillion, positioning it as the second-most valuable entity globally—behind Apple and ahead of Microsoft. Anticipation is mounting both internally and externally concerning the imminent release of its fourth-quarter earnings after Wednesday’s market close.
The stakes are immense for Nvidia, Jensen Huang, and other stakeholders in artificial intelligence, particularly companies like Microsoft, Meta Platforms, Amazon.com, and Google, which are rapidly advancing their AI applications.
A new concern has arisen as competition intensifies not only from Silicon Valley adversaries but also from at least one Chinese competitor, DeepSeek. On January 27, DeepSeek announced its ability to develop large language model technologies aimed at rivalling ChatGPT, Google’s Gemini, Anthropic’s Claude, and Elon Musk’s Grok. DeepSeek asserts it can create AI systems at a significantly lower cost than Nvidia and others, utilizing lower-powered chips that are not subject to U.S. export controls.
On the day of DeepSeek’s announcement, Nvidia shares plummeted by 17%, recovering most losses by February 20, before another decline on Friday.
Given these developments, Nvidia faces the challenge of demonstrating its market competence through several key measures:
– Delivering its Blackwell graphical processing units, which are ultra-fast processors introduced last year, at scale while continuing to dominate.
– Ensuring its technology remains robust enough to command premium pricing from its customers, who might face a year-long wait for order fulfillment.
– Scaling up production to expedite product delivery, thus sustaining market dominance.
– Providing investors with sufficient guidance to achieve the current price target of $172.22, which translates to a potential 28.1% gain from Friday’s close.
The upcoming release of Nvidia’s fourth-quarter numbers is being closely watched, with the projections indicating:
– A quarterly earnings estimate of 85 cents per share, reflecting a 60% increase from the previous year.
– A quarterly revenue estimate of $38.2 billion, which is up 72.6% from a year ago.
– A full-year earnings forecast of $2.95 per share, marking a 127% increase from the previous year.
– A full-year revenue estimate of $129.3 billion, indicating a 112% rise.
The focus also turns back to the issue posed by DeepSeek. Artificial intelligence is predicated on the concept that combining cutting-edge processing speeds with vast data allows users to query an AI system and receive responses that consider all the stored information. This technological leap is likened to the transformative period when space scientists recognized that computers could solve complex engineering problems faster than conventional tools like slide rules.
Central to this computational power are the chips, whether produced by Nvidia or other manufacturers.
In the upcoming week, besides Nvidia, other major companies are set to release their results. Market volatility is anticipated after significant losses were registered on Thursday and Friday. The S&P 500 Index fell by 1.6% for the week, the Dow Jones Industrial Average dropped by 2.6%, largely due to a 749-point decrease on Friday, and the Nasdaq Composite Index decreased by 2.5%.
Contributing factors to the market decline include a nearly 10% drop in the University of Michigan’s consumer sentiment index, influenced by concerns over rising inflation, tariff issues, and the uncertainty stemming from the Trump Administration’s cost-and-job cutting measures.
On the horizon, Salesforce, a significant user of AI applications, is set to report results concurrently with Nvidia on Wednesday. Its fiscal third-quarter earnings estimate stands at $2.61 per share, representing an approximate 14% increase from the prior year, with projected sales of $10 billion, which is up 8.1%.
Moreover, Dell Technologies will report on Thursday after market close, having solidified its role as a prominent supplier of high-end servers utilized in AI. Its fourth-quarter earnings estimate is $2.51 per share, increasing by 14% from the previous year, and revenues of $24.5 billion, up 9.9%.
In the wider retail sector, Home Depot, Lowe’s, and TJX Companies are also scheduled to release their earnings reports soon. Home Depot’s fourth-quarter earnings are projected at $3.04, with sales expected to reach $38.7 billion, up by 11.7%. Lowe’s anticipates fourth-quarter earnings of $1.84, representing a 4% increase, while sales are projected at $18.3 billion, reflecting a decrease of 1.7%. TJX Companies expects earnings of $1.16, a decrease from the previous year’s $1.22, with sales estimated at $16.2 billion, down 1.1%.
Market observers will be keenly watching these companies’ reports for insights into consumer outlooks, particularly considering that Walmart’s recent guidance, which was lower than expected, contributed to the recent stock market slump. Walmart’s CFO, John David Rainey, commented on the challenging financial conditions consumers are facing.
