Nvidia shares plunged 17% on Monday, resulting in a market cap loss of close to $600 billion, the biggest drop ever for a U.S. company.Nvidia shares plunged 17% on Monday, resulting in a market cap loss of close to $600 billion, the biggest drop ever for a U.S. company.
The chipmaker’s stock price plummeted 17% to close at $118.58. It was Nvidia’s worst day on the market since March 16, 2020, which was early in the Covid pandemic. After surpassing Apple
The selloff was sparked by concerns that Chinese artificial intelligence lab DeepSeek is presenting increased competition in the global AI battle. Late last month, DeepSeek unveiled a free, open-source large language model that it says took only two months and less than $6 million to build, using reduced-capability chips from Nvidia, called H800s.
Nvidia’s graphics processing units (GPUs) dominate the market for AI data center chips in the U.S., with tech giants like AlphabetMetaAmazon
The analysts, who recommend buying Nvidia shares, said they “think this view is farthest from the truth,” and that advancements in AI will most likely lead to “the AI industry wanting more compute, not less.”
But after Nvidia’s huge run-up — the stock soared 239% in 2023 and 171% last year — the market is on edge about any possible pullback in spending. Broadcom
Data center companies reliant on Nvidia’s GPUs for their hardware sales saw big selloffs as well. DellHewlett Packard EnterpriseSuper Micro ComputerOraclePresident Donald Trump’s latest AI initiative, fell 14%.
For Nvidia, the loss was more than double the $279 billion drop the company saw in September, which was the biggest one-day market value loss in history at the time, unseating Meta’s $232 billion loss in 2022. Before that, the steepest drop was $182 billion by Apple in 2020.
Nvidia’s decline is more than double the market cap of Coca-ColaChevronNetflix
CEO Jensen Huang’s net worth also took a massive hit, declining roughly $21 billion, according to Forbes’ real-time billionaires list. The move demoted Huang to 17th on the richest-person list.
The sudden excitement around DeepSeek over the weekend pushed its app past OpenAI’s ChatGPT as the most-downloaded free app in the U.S. on Apple’s App Store. The model’s development comes despite a slew of recent curbs on U.S. chip exports to China.
Venture capitalist David Sacks, who was tapped by Trump to be the White House’s AI and crypto czar, wrote on X that DeepSeek’s model “shows that the AI race will be very competitive” and that Trump was right to rescind President Joe Biden’s executive order last week on AI safety.
“I’m confident in the U.S. but we can’t be complacent,” Sacks wrote.
Nvidia is now the third most-valuable public company, behind Apple and Microsoft
