Nvidia (NASDAQ:NVDA) just hit a rough patch, underperforming the S&P 500 by 9% over the past month. Investors are jittery over three big concernsChina's DeepSeek shaking up AI demand, a potential shift from GPUs to ASICs, and delays in Nvidia's next-gen Blackwell chips. But according to Evercore ISI, this sell-off is a golden buying opportunity ahead of the company's February 26 earnings call. After conducting deep-dive channel checks with top AI engineers at major hyperscalers, Evercore remains bullish, adding Nvidia to its Tactical Outperform list and maintaining a $190 price target. Their key takeaway? DeepSeek's cost advantages are more evolutionary than revolutionary, and cheaper AI compute could actually fuel demand rather than hurt it.

• Warning! GuruFocus has detected 3 Warning Signs with NVDA.

Nvidia's competitive moat isn't just about its hardwareit's the software. Evercore points to Nvidia's NIMS and NeMo tools, which offer enterprises an unmatched level of flexibility for deploying AI models across cloud and on-premise environments. While ASICs might sound like a threat, Evercore analysts argue that Nvidia's deep software stack and developer community keep it miles ahead of competitors like AMD (NASDAQ:AMD) and AWS. And though Blackwell's rollout is now expected in mid-2025, any delays won't leave Nvidia empty-handedhyperscalers are still snatching up H100 chips in the meantime. With the stock trading at 29x forward earnings, well below its 8-year median of 36x, Evercore sees room for upside.

The biggest risk? Custom AI chips gradually eating into Nvidia's market share. But Evercore's latest industry checks suggest that's more of a long-term concern than an immediate one. Instead, demand for AI is only accelerating, and innovations like LiquidAI, which enable models to train during inference, highlight the need for programmable platforms like Nvidia's GPUs. With all eyes on its upcoming earnings, Nvidia is entering a critical momentone that could determine whether it continues its dominance or faces a real shift in AI infrastructure.