Nvidia is gearing up to announce its Q4 earnings on February 26, following a remarkable year where its stock soared by 100%, largely driven by the rapid expansion of artificial intelligence (AI). As major tech players like Amazon, Meta, Microsoft, and Alphabet significantly increase their investments in AI infrastructure, Nvidia has positioned itself as a key player, thanks to its high-performance chips. With these companies investing tens of billions into AI, Nvidia has reinforced its leadership in the chip market.

According to Josh Gilbert, Market Analyst at eToro, “AI’s dependence on powerful chips places Nvidia in a coveted position in this competitive landscape; no matter who comes out on top, Nvidia is enjoying the benefits.”

However, the company is not without its challenges. A significant concern is the rise of DeepSeek, a Chinese competitor whose launch in January resulted in a staggering $600 billion drop in Nvidia’s market value in just one day. DeepSeek’s technology has the potential to lessen the reliance on costly, high-end GPUs for AI development, which could threaten Nvidia’s market stronghold.

On top of the competition from DeepSeek, Nvidia is grappling with ongoing supply shortages. “The imbalance of demand and supply has impacted Nvidia in past earnings reports,” Gilbert noted. “Even though executives have reassured Wall Street that Blackwell revenue is projected to exceed ‘several billion dollars’ in Q4, production capacity constraints continue to pose a challenge. Where there’s unmet demand, there’s always an opportunity for competitors to step in.”

Despite these potential obstacles, market expectations remain elevated. Analysts anticipate Q4 revenue of $38.2 billion and net income of $20.9 billion. All eyes will be on whether Nvidia can once again exceed expectations and provide strong future guidance, as investors are now looking for near-perfect performance from this tech giant.

“The consensus estimate is optimistic, but with such high expectations, Nvidia must confront them directly to sustain its momentum,” Gilbert concluded.