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Nvidia and Salesforce leave bulls wanting as AI trade stalls

Feb 27, 2025 - financialpost.com
Nvidia and Salesforce have faced challenges in maintaining momentum in the AI market, with Nvidia's recent earnings report failing to meet high expectations and Salesforce's AI initiatives contributing modestly to revenue. Despite Nvidia's solid results, questions about the sustainability of AI spending and the impact of emerging competitors like China's DeepSeek persist. The AI trade, once robust, is now experiencing volatility and uncertainty, partly due to geopolitical tensions and economic factors such as U.S. tariffs under President Donald Trump.

While Nvidia remains a market leader, the long-term growth of AI will likely depend on software companies and enterprise IT departments realizing tangible returns from AI investments. The tech sector is navigating a complex landscape, with concerns about the future of AI spending and market dynamics over the next few years. Despite these challenges, some investors see potential buying opportunities in Nvidia and other AI-related stocks.

Key takeaways:

  • Nvidia's earnings report failed to meet high expectations, raising questions about the longevity of AI spending.
  • Salesforce's disappointing forecast for its AI agents suggests a less robust AI trade compared to previous years.
  • Concerns about American dominance in AI have been heightened by the emergence of China's DeepSeek and ongoing U.S. tariffs.
  • Long-term confidence in AI's growth is expected to come from software companies and enterprise IT departments as they realize tangible returns from AI investments.
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