The great sage of modern baseball, Yogi Berra, said: “It’s hard to predict, especially about the future.” His observation is valid in all layers of life, especially in the world of high technology.
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In November 2022 Openii published Chatgpt and showed us how generative Ai Can it break our terms about what machine learning can do. Last month, Chinese startup Deepsek published its latest AI model, R1, and shook the world of Shaker.
The R1 allegedly surpassed the best AI models on the American scene – but what makes this development really important is how. The R1 model is an open source, and Deepseek claimed that the cost of training AI – the combined cost of background technology and hardware that allows it – came with only $ 6 million. It is a small part of the costs associated with some of the US AI systems based in the US, such as Chatgpt, Gemini or Grok.
But is this a sign of seismic shift in the development of AI or just a one -off anomaly? The Tristan Gerra Analyst is leaning in the latter, suggesting that it could be more of an exception than the beginning of the trend.
“Deepsek is high in attachment, but time will say whether it creates a disorder in current AI models and AI architectures – we strongly doubt it does not. Already distributed costs without which Deepseek would not exist. In addition, we notice the implementation of lower/lower costs as further demand for AI systems, and the price of elasticity is launching a proportionate increase in the amount of GPU, “Gerra said.
With this in mind, Gerra doubles on Nvidia (NAMDAQ: NVDA) and Micron (Nasdaq: MU) as a Top AI game. Both companies are leders in the industry, both enjoying the assessments of “strong purchases” analysts, and both benefit from Ai’s tireless growth. Let’s look closer.
Nvidia
First on our list, Nvidia, is not just the world’s greatest semi -manager Company – it’s one of the largest public trading companies on Wall Street. The shares of chip manufacturers have lost the historic $ 590 billion after the title of Deepseek, the largest one -day fall ever recorded.
However, the meteoric increase in NVIDIA was well documented and even for a recent loss associated with deep depths, the shares have received 441%in the last three years. The profits arrived with a very strong sale because NVIDIA GPUs proved the most popular among the data center operators and the AI app developers.
The R1 edition was a direct challenge to this domination. According to Deepsek, their latest AI model does not use the latest versions of the top processing chips, nor do they rely so much on high -speed calculation. As a result, it makes only a fraction of the power request we see in the established AIS. If R1 fulfills this hype, he would become the first of the new AI models, and Nvidia, who founded his success on the dominance of the market for expensive, top-notch, AI that can be adapted to AI, will be forced to adjust to adaptation quickly. This obviously scared the investors.
Nvidia seems to take this development in progress. The company has published a statement that praised Deepseek for impressive progress in AI technology, especially in demonstration of the model scales. The company also noted that Deepseek’s R1 is still based on previous AI models – and those who used more traditional AI training methods.
Assuming Nvidia is correct, the market for top-notch AI chips does not leave NVIDIA has a leading position in the market, despite the delays in the New Blackwell series. Last summer, Nvidia was discovered by the successor of the Blackwell series, Rubin, a new GPU architecture scheduled for the 2026 edition.
In his last rally of financial results, covering the Fiscal 3Q25, Nvidia reported about $ 35.08 billion in revenue, which is 93% compared to one year compared to the year and beating the forecast for $ 1.95 billion. At the bottom, NVIDIA’s EPs that are not 81 cents gaaps were 6 cents per share better than expected. The company finished the fiscal third quarter with $ 38.5 billion in cash and other liquid assets, providing a company of deep pockets to make a time storm.
For the threeist Gerra, it is crucial that Nvidia remains a solid player with a strong product line. A 5-star analyst says in his writing NVIDIA, “We are slightly reduced by our 2h gross margin of Nvidia, given our expectation on the lower GB200 mixture compared to the B200/B300 this year based on the system level. Reduction of the assessment of our unit for Grace this year by 1m per 1.5 million units to calculate the challenge of implementation; This mixture of mixes could reduce progress to our AI revenue assessment for a year. There are no changes in our EPS estimates: In addition to the expected pressure on the B200 channels, we expect strong demand B300, while the Rubin platform should catalyze further growth of performance/revenue. NVDA remains the best idea. “
As the ‘best idea’, Nvidia’s shares get an excess (ie buy) from Gerra, whose target price of $ 195 is on the section implies an increase of 49% compared to current levels in the next year. (To watch Gerra -Out Click here)
Overall, NVIDIA shares have a strong purchase assessment from the consensus of street analysts, based on 39 recent reviews that include 37 for buying and 3 for retaining. The shares are currently traded for $ 131.14 and have an average targeted price of $ 178.86, suggesting a one -year potential of an increase of 50%. (See NVDA Prognosis of shares)
Micron technology
Next on our list is Micron, a chip company for a Boise -based semiconductor, Idaho. The company is especially known for its memory chips, essential components of AI BUM. Micron’s high width chips (HBM) is especially suitable for AI use.
In February last year, Micron announced that he was a partner with Nvidia, providing his HBM3e chips for a larger company used in their semiconductors who are capable of AI. More recently, Micron’s HBM4 has been selected for use on the upcoming Rubin Platform of Nvidia. Micron boasts that his HBM chips can reconcile or exceed the performance of rivals while spending 30% less power, which gives them a competitive advantage in a heavy field.
Like Nvidia up, Micron hit the release of Deepseek R1. Micron, like most of his peers, has had a great benefit to the rise of AI in the last few years. But by reinforcing and providing powerful memory chips that require AI data centers and high speed counts, the company is vulnerable to Deepseek’s lower price, a less energy AI competitor. The chips consume less power but retain their performance: the main qualities that will be needed to compete with the Deepseek model.
Like Nvidia up, Micron comes to this fight with a record of success. The company’s earnings and revenues have been moving up lately. In the last reported period, Fiscal 1Q25, Micronov $ 8.71 billion in revenue increased by 84% compared to one year and filled the street, while EP’s non-GAAP of $ 1.79 won a 2-cent forecast forecast . Micron had $ 6.7 billion in cash and cash equivalents at the end of the fiscal first quarter.
Again applying with Baird Gerra analyst, we think it is optimistic on Micron – stating the exposure to Nvidia’s Rubin as a key point. Gerra says Micron, “We are a bull on the ruby ramp, which the extension will be very positive to HBM content. The larger size of the matrix and I/o number of rubies means 30%+ increase in HBM capacity needed to support the flat volume. This dynamics supports continuous The HBM 2026 supply and in our opinion will benefit from prices/margins remains the best idea. “
Looking in advance, the analyst gives him stakeholders outweigh (ie buy) a rating, with a targeted price of $ 130 indicating an increase of 42% in the next 12 months.
A strong assessment of the consensus of purchases on Micron is based on 23 recent reviews that fall apart at 21 purchases and 2 postures. The shares are $ 91.68 prices, and their average goal of $ 136.1 is a little more lush than Baird View, suggesting a one-year increase of 48%. (See Stock prognosis)
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Statement of renunciation of responsibility: Opinions expressed in this article are solely the opinions of prominent analysts. The content is intended only for information purposes. It is very important to make your own analysis before any investment.
