Key Takeaways
- Gavin Baker of Atreides Management says DeepSeek earns $38 in inference revenue per GPU hour off-peak, which he puts at $100 billion a year per gigawatt.
- That’s about 2.5x the roughly $40 billion of Nvidia hardware in a gigawatt, every year, so Nvidia’s customers can afford to keep paying its prices.
- Short seller Jim Chanos puts SpaceX’s AI revenue at about a fifth of Baker’s rate, and even that would cover a gigawatt’s Nvidia hardware in about two years.
- After chip stocks’ longest losing streak since 2008, Nvidia trades at 18x forward earnings, against a three-year average of 30x.
Chip stocks just had their longest losing streak since 2008, as fears grow that the AI build-out is a bubble. Then one investor posted a stat that should be great news for Nvidia (NVDA).
Gavin Baker, managing partner and CIO of Atreides Management, co-hosted the pregame show at Nvidia’s GTC Berlin conference this week. Then he posted this on X:
“Deepseek is generating $38 in inference revenue per GPU hour off-peak. That is $100b per gigawatt. 2x this at peak.”
His (somewhat sarcastic) verdict? “Seems important.”
It goes straight at the biggest question hanging over the build-out: whether the buyers can ever earn back what they’re spending.
TIKR tracks 62 analysts on Nvidia. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nvidia, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nvidia’s Analyst Ratings
A gigawatt earns its keep fast
Jensen Huang has put Nvidia’s take at about $80 billion for every two gigawatts of compute, or roughly $40 billion a gigawatt.
So at DeepSeek’s off-peak rate, a gigawatt of GPUs brings in about $100 billion a year against about $40 billion of Nvidia hardware. That’s 2.5x the Nvidia bill every year, and the bill is paid off in about five months. At peak prices, it’s paid off twice as fast.
(That’s revenue before power, buildings and staff, and it assumes every GPU hour gets sold.)
That’s why buyers keep paying Nvidia’s prices…
…and it shows in a gross margin above 70% in each of Nvidia’s last three fiscal years (through January 2026):
Plus: the hardware keeps earning for longer than people assumed. “What people thought used to be a four-year life cycle really is probably eight to maybe more,” Huang told Deirdre Bosa at GTC Berlin.
And it’s holding its price. In a clip played on TBPN, Elon Musk said older Nvidia H100s now rent for more than they did when they were new, and that SpaceX’s short-term compute contracts are renewing at higher dollars per watt.
DeepSeek is one lab
Of course, DeepSeek is one Chinese lab charging spot prices, and its numbers may not hold for everyone else.
Short seller Jim Chanos posted that SpaceX’s annualized AI revenue was “below $20M per MW in the 3Q ($19.5M), a far cry from the $40-50M figures that were thrown around during the quarter.” He added that this is much closer to where the rest of the industry sits.
That’s about $19.5 billion per gigawatt, or a fifth of Baker’s number.
Even at that rate, a gigawatt pays off its Nvidia hardware in about two years. And if Huang is right that the chips stay productive for eight, there’s a lot of revenue left after the Nvidia bill is paid.
18x doesn’t look like a bubble to me
Analysts already expect Nvidia’s revenue to keep climbing. It was $216 billion in the year ended January 2026. Consensus is $412 billion for this fiscal year and nearly $1.1 trillion for the year ending January 2030:
(Only eight analysts have an estimate that far out, so the last bar is a rough guess.)
But the selloff has Nvidia priced as if those estimates were in doubt. It trades at 18x forward earnings. That’s close to its cheapest in three years and far below its 30x average:
My take: if a gigawatt earns anywhere between Chanos’s number and Baker’s, Nvidia’s customers can afford the bill. And at 18x, the market isn’t paying much for that.
Still, DeepSeek’s price is one data point. Nvidia’s own report next month will be the next real test of whether buyers are still spending.
So what is Nvidia stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Nvidia could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
