- NVIDIA’s shares plummeted 17% on Monday, resulting in a staggering loss of nearly $600 billion in market capitalization, marking the largest single-day decline for any U.S. company in history.
- The sell-off, which rippled across the U.S. tech sector, was triggered by growing concerns over heightened competition from Chinese AI lab DeepSeek.
- Companies reliant on NVIDIA’s chips, including Dell, Oracle, and Super Micro Computer, also saw significant declines, with each dropping at least 8.7%.
NVIDIA’s stock price fell to $118.58, its lowest close since March 16, 2020, during the early days of the COVID-19 pandemic. This sharp decline came just days after NVIDIA surpassed Apple to become the most valuable publicly traded company. The drop also contributed to a 3.1% slide in the tech-heavy Nasdaq index.
The sell-off was fueled by fears that DeepSeek, a Chinese AI lab, is emerging as a formidable competitor in the global AI race. In late December, DeepSeek unveiled an open-source large language model, which it developed in just two months at a cost of less than $6 million using NVIDIA’s H800 chips, a lower-capacity version of its high-performance processors.
NVIDIA’s graphics processing units (GPUs) currently dominate the U.S. market for AI data center chips, with tech giants like Alphabet, Meta, and Amazon investing billions in these processors to train and operate their AI models. However, DeepSeek’s rapid advancements have raised concerns about a potential slowdown in demand for NVIDIA’s GPUs.
Analysts at Cantor Fitzgerald noted in a report that DeepSeek’s latest innovation has sparked “great angst” about the future of compute demand, leading to fears of a peak in GPU spending. Despite this, they believe the AI industry will continue to demand more computing power, not less, and recommend buying NVIDIA shares.
However, after NVIDIA’s meteoric rise—its stock surged 239% in 2023 and 171% in 2024—investors are wary of any signs of a spending pullback. Broadcom, another U.S. chipmaker benefiting from the AI boom, also saw its shares drop 17% on Monday, wiping $200 billion off its market cap.
Data center companies dependent on NVIDIA’s GPUs experienced significant declines as well. Dell, Hewlett Packard Enterprise, and Super Micro Computer each fell at least 5.8%, while Oracle, part of former President Donald Trump’s latest AI initiative, dropped 14%.
NVIDIA’s 600billionlossmorethandoubleditspreviousrecorddropof600billionlossmorethandoubleditspreviousrecorddropof279 billion in September, which had been the largest single-day market value loss in U.S. history at the time. It also surpassed Meta’s 232billionlossin2022andApple′s232billionlossin2022andApple′s182 billion decline in 2020.
To put the loss into perspective, NVIDIA’s decline exceeds the combined market capitalization of Coca-Cola and Chevron and is larger than the individual market values of Oracle and Netflix.
The sell-off also took a toll on NVIDIA CEO Jensen Huang’s net worth, which dropped by approximately $21 billion, according to Forbes’ real-time billionaires list. Huang fell to 17th place on the list of the world’s richest people.
Meanwhile, DeepSeek’s rapid rise has captured significant attention. Over the weekend, its app surpassed OpenAI’s ChatGPT to become the most-downloaded free app on Apple’s U.S. app store. This development comes despite recent U.S. restrictions on chip exports to China.
Venture capitalist David Sacks, who was appointed by Trump as the White House’s AI and crypto czar, commented on X that DeepSeek’s model “shows that the AI race will be very competitive.” He also praised Trump’s decision to rescind President Joe Biden’s recent executive order on AI safety, emphasizing that the U.S. cannot afford complacency in the AI sector.
Following Monday’s historic drop, NVIDIA is now the third most-valuable public company, trailing behind Apple and Microsoft.
