The chip giant has stayed relevant even as DeepSeek and other “reasoning” AI models rise.

Stocks slid Thursday, weighed down by chip giant Nvidia (NVDA) in the wake of Wednesday's earnings report, leading semiconductor and other AI stocks lower. Nvidia shares finished Thursday off more than 8%,

While Nvidia delivered a surge in quarterly revenue, it said first-quarter margin would tighten as it ramps production of its new flagship AI chips.

Nvidia on Wednesday reported a surge in fourth-quarter profit and sales as demand for its specialized Blackwell chips that power artificial intelligence systems continued to grow.

Nvidia, the chip giant at the heart of the artificial intelligence (AI) boom, said its business remained strong, despite fears of a bubble stirred by the emergence of Chinese AI firm DeepSeek last month.

Nvidia's forecast also helps allay doubts around a slowdown in spending on its hardware that emerged last month. The company reported quarterly results on Wednesday.

Nvidia delivered results that beat on both the top and bottom line. The company also provided a forecast that was more robust than Wall Street expected. The best news was CEO Jensen Huang's commentary about the state of artificial intelligence (AI).

There's a steep cost to reasoning AI, or AI that can provide a step-by-step breakdown of its thought process along with a response. Nvidia CEO Jensen Huang told CNBC on Wednesday that next-generation AI models capable of reasoning through problems before arriving at an answer,