Nvidia lost nearly $600 billion in market value on Monday, marking the biggest one-day drop for any company in U.S. history. The chipmaker’s stock price fell by 17%, closing at $118.58. This was Nvidia’s worst market day since March 16, 2020, during the early days of the Covid pandemic. After Nvidia passed Apple last week to become the most valuable public company, its stock drop on Monday led to a 3.1% drop in the tech-heavy Nasdaq.
Deepseek Was Developed with Less Powerful NVIDIA H800 chips
The sharp decline was triggered by worries that the Chinese AI company DeepSeek is becoming a bigger competitor in the global AI race. In December, DeepSeek released a free, open-source language model that it said took only two months and less than $6 million to create, using Nvidia’s H800 chips. These chips are less powerful than the more advanced models.
Nvidia’s graphics processing units (GPUs) dominate the market for AI data center chips in the United States. Major tech companies like Alphabet, Meta, and Amazon are spending billions on them to train and run their AI models. Analysts at Cantor said in a report that DeepSeek’s new technology has raised serious concerns about how it could affect demand for GPUs. It leads to fears that spending on these chips might have reached its peak.
Analysts argue that fears of slowing AI growth are overblown, predicting increased demand for computing power. They recommend buying Nvidia shares despite the company’s recent 17% drop, which lost it nearly $600 billion in market value.
Nvidia’s steep decline followed major gains — 239% in 2023 and 171% in 2024 — and sparked sell-offs in other tech companies. Broadcom fell 17%, while data center firms like Dell, HP, and Oracle saw losses too. The loss was over twice that of Coca-Cola and Chevron’s market value combined. CEO Jensen Huang’s net worth dropped by $21 billion, pushing him down to 17th on the billionaire list.
DeepSeek’s app surged to #1 on the U.S. App Store, overtaking ChatGPT, despite U.S. chip export restrictions. Venture capitalist David Sacks praised the rise of DeepSeek, noting that the AI race is heating up and cautioning against complacency.
