Why NVDA Is Climbing Today

Nvidia (NVDA) is advancing 3% this morning after plunging nearly 17% yesterday. The rebound came after JPMorgan reiterated its Overweight rating on NVDA today.

Why JPMorgan Remains Bullish on NVDA

Noting that Chinese startup DeepSeek reported that it had trained an AI model for a very low price of about $5.6 million, JPMorgan asserted that this news is actually positive for chip makers. Specifically, according to the bank, when computing products become less costly to manufacture historically, the demand for chips and the consumption of more expensive chips have increased. The latter trend should play out going forward in the AI chip market, JPMorgan asserted.

Further, the bank wrote that some information about DeepSeek’s model has not been provided. For example, the total cost of all training sessions may not have been included in the $5.6 million total, and the degree to which the start-up used existing open-source models was not disclosed, JPMorgan stated.

“We believe it is crucial to validate these costs before drawing conclusions,” the bank wrote.

The Recent Price Action of NVDA Stock

In the last month heading into today, the shares had dropped 12%, while they had pulled back 16% in the last three months.

While we acknowledge the potential of NVDA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.