Nvidia peaked in 2024, but are we all set to see its downfall already? If you’re among those wondering if you should buy or sell Nvidia stock in 2025, then know that you’re not alone. The Deepseek AI vs Nvidia debacle in January saw the latter’s stock plunge 17%, dealing a major blow to the company’s numbers and overall reputation.
According to VettaFI, Nvidia was a top-15 holding in 469 ETFs, meaning that a significant portion of these ETFs’ value was tied to Nvidia’s performance. As a result, the tech-heavy Nasdaq Composite Index, which includes Nvidia, also experienced a 3.1% decline on the same day.
Nvidia’s falling stock price after the AI news did begin rising back up eventually. These changes left investors wondering if they should buy Nvidia stock and partake in its rise back up, or sell stock so that they aren’t affected by the fluctuations that are inevitably coming.
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Before You Buy or Sell Nvidia Stock in 2025, It’s Best to Understand the Situation First
On January 27, Chinese start-up Deepseek revealed its advanced AI services to the world, adding that it had been able to produce the Large Language Model for less than $6 million and in less time than it had taken other, bigger businesses.
The production price was so shockingly low that businesses began wondering if they had overestimated Nvidia’s value and the need for its high-end AI chips. After all, if Deepseek could manage to find such success with inferior hardware, soon other businesses would too, leaving the high-performing chips to become a waste of resources.
Investors began to consider the possibility that Nvidia’s sharp rise to fame would soon come to an end, causing their investments in the organization to lose value.
Deepseek AI vs Nvidia, Is There a Chance That Nvidia’s Dominance Will Begin to Fall Off?
While investors have been wondering if Nvidia has been overvalued or undervalued, there are a lot of factors to take into account. Nvidia’s dominance today primarily stems from its contributions to the AI industry, but the company does more than provide for AI. From gaming support to tech hardware that hasn’t been optimized for AI, Nvidia has its fingers in many pies. The company’s stocks rose 171% last year, and it wasn’t just a draw of luck that caused its rise.
While Deepseek may be able to optimize simpler hardware, other organizations that have already built their systems on AI are unlikely to back away from Nvidia’s premium chips. Businesses that work with AI will continue to seek and use the best hardware available to them. Even if they don’t over-optimize, it is still likely that they will use other Nvidia hardware.
The risk of other companies like Deepseek rising to the top with older, more outdated hardware support is unlikely as they too will aspire for power and performance over efficiency.
Additionally, other Chinese companies like Deepseek may find it even harder to gain access to advanced Nvidia technology soon. Deepseek used Nvidia H800 GPUs because of U.S. export restrictions that put better technology out of its reach. With the ongoing rise of restrictions on Chinese businesses and the threat of incoming tariffs, their reach will likely shrink further.
The suspicions and criticisms that are now coming up against Deepseek’s AI suggest that things are not looking too good for the company either.
Should I Buy Nvidia Stock?
Looking at Nvidia’s trailing price-to-earnings (P/E) ratio suggests that the stock is expensive, however, its forward 27x P/E ratio suggests there is more to consider. Analysts predict 52% revenue growth in fiscal year 2026, making its current price appear to be more reasonable. While the threats presented by Deepseek cannot be denied, analysts predict that the stock drop will be temporary and Nvidia will remain a profitable investment in the long run.
All things considered, Nvidia still continues to be a valuable investment that can continue to reward users with good returns. If you’re among those wondering whether to buy or sell Nvidia stock in 2025, it does appear to be a good time to make a purchase and add it to your portfolio with the current fall in price. It is the lowest it has been in a while and we don’t expect to see such a steep drop again in the coming months.
Nvidia’s fourth-quarter fiscal year 2025 earnings report due on 26 February should be a helpful tool in reassuring investors that the organization still remains a worthwhile investment, after which the stock prices are expected to rise back up. Whether you decide to buy or sell Nvidia stocks this year, make sure you make an informed decision and do not put all your eggs in one basket. The situation with Nvidia has made it clear that anything could change in a heartbeat, which is why the industry remains a volatile one.