A Shocking Earthquake Shakes Nvidia Stocks as Chinese Giant DeepSeek Emerges

A Shocking Earthquake Shakes Nvidia Stocks as Chinese Giant DeepSeek Emerges

Wall Street witnessed its largest loss in history as Nvidia, a leader in semiconductor manufacturing, lost $465 billion in market value during a single trading session on Monday, January 27, 2025. This came amid the rise of DeepSeek, a Chinese startup in artificial intelligence offering low-cost solutions.

The sudden drop in Nvidia’s stock price, down by 13% shortly after the market opened, resulted from investor concerns over DeepSeek's competitive edge. This loss broke Nvidia's previous record from September, when its shares fell by 9%, erasing $279 billion in value.

These declines triggered a ripple effect in the broader market. The S&P 500 fell by 2.3%, and the Nasdaq 100 dropped by 3.6%, reflecting Nvidia's central role in driving tech growth.

Reasons Behind Nvidia's Loss:
The competitive pressure from DeepSeek's affordable AI solutions.
Concerns about the massive spending by US companies like OpenAI and Meta with limited returns.
The success of DeepSeek's AI model, which quickly climbed App Store rankings last week.

Impact on Other Companies:
Stocks of Micron and Arm Holdings dropped by more than 8% and 9%.
Broadcom and AMD saw declines of 14% and 5%, respectively.
Energy-related companies, such as Constellation Energy and Vistra, faced losses exceeding 12% and 19%.
International markets, including Dutch and Japanese chip companies, experienced significant downturns as well.