Nvidia in the S&P 500
Nvidia and other companies benefiting from the AI boom have been a major reason the S&P 500 has climbed to record after record recently, with the latest coming last week.
The effect of tariffs
Their explosion of profits has helped to propel the market despite worries about stubbornly high inflation and possible pain coming for the U.S. economy from tariffs and other policies of President Donald Trump. But those tariffs are still “an unknown,” Kress said, until Nvidia can better understand what the Trump administration’s plan is. “We are awaiting,” she said, adding that the company would follow any export controls or tariff rules.
DeepSeek’s impact on Nvidia
The fourth-quarter earnings are the company’s first report since Chinese company DeepSeek boasted it had developed a large language model that could compete with ChatGPT and other U.S. rivals, but was more cost-effective in its use of Nvidia chips to train the system on troves of data.
The frenzy over DeepSeek caused $595 billion in Nvidia’s wealth to vanish briefly. But the company in a statement commended DeepSeek’s work as “an excellent AI advancement” that leveraged “widely-available models and compute that is fully export control compliant.”
“DeepSeek R1 has ignited global enthusiasm,” Huang said on Wednesday’s earnings call. “It’s an excellent innovation, but even more importantly, it has open-sourced a world-class reasoning AI model. Nearly every AI developer is applying R1, or chain of thought and reinforcement learning techniques like R1, to scale their models’ performance.”
The next wave of AI: It’s coming
Speaking to investors, Huang said the “next wave” of AI is coming with “agentic AI for enterprise, physical AI for robotics and sovereign AI as the different regions build out their AI for their own ecosystems.”
“We’re in the centre of much of this development,” Huang said.
Nvidia’s numbers, investors’ response
Wall Street once again fixated on an earnings report from Nvidia, the main player in the artificial intelligence mania. The chipmaker reported earnings after the bell Wednesday that topped analyst forecasts, and shares added 2% in after-hours trading, perhaps indicating that Wall Street quietly hoped for even better results.
This is Nvidia’s first earnings report since a Chinese upstart, DeepSeek, upended the artificial-intelligence industry by saying it has developed a large language model that can compete with big U.S. rivals without having to use the most expensive chips. Nvidia’s market value saw a one-day drop of nearly $600 billion after the news came out.