NVIDIA reported its fourth-quarter and fiscal year 2025 earnings yesterday. The company achieved record quarterly revenue with an incredible 78% YoY growth. Every major company investing in AI, is putting its CapEx to work on NVDA chips and architecture. Having said that, there are two clouds on the horizon the company is aware of: (1) Deepseek, which was able to achieve comparable results with supposedly prior generation chips, which makes you wonder if companies are overspending to compete. And (2) they are subject to 25% tariffs on their chips, as they design the chips but they’re made by TSMC in Taiwan. The company is being affected by the law of big numbers where the explosive growth we saw a year ago is coming down to “only” 78%. This is the poster child of the Mag7, which investors are supposedly leaving to invest in Europe among, other things. NVDA Price to Earnings ratio is 52.
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