Evercore ISI upgraded Nvidia (NVDA, Financials) to Tactical Outperform ahead of the chipmaker's fiscal fourth-quarter earnings report on Feb. 26, citing continued strength in AI computing despite recent investor concerns.
Fears that DeepSeek may be moving AI workloads from Nvidia's GPUs to Application-Specific Integrated Circuits combined with possible delays in the Blackwell chip release have caused lags in Nvidia shares.
Evercore researchers noted, meanwhile, that DeepSeek's influence on artificial intelligence demand is "evolutionary rather than revolutionary." According to a business poll, while DeepSeek's cost cuts increase efficiency, they are unlikely to significantly change Nvidia's AI demand. Rather, reduced prices might inspire more acceptance of AI tokens and hasten developments in bigger parameter models and multimodal artificial intelligence.
Evercore thinks Nvidia retains a notable advantage in artificial intelligence computing despite increasing competition, especially among hyperscale—large-scale cloud infrastructure providers. The company projects Nvidia to be five to ten years ahead of rivals like Advanced Micro Devices (AMD, Financials) and Amazon Web Services.
Although ASICs are likely to become popular in AI workloads, Nvidia is predicted to have a commanding presence in cloud and business AI projects. Over the long run, Evercore projects that Nvidia will handle 50–70% of internal AI tasks, hence supporting its market supremacy.
Premarket trading saw stronger Nvidia shares after the upgrade. Evercore sees issues regarding DeepSeek and ASIC adoption as overdone and is positive about Nvidia approaching its earnings announcement.
