Nvidia stock plummets, loses record $589 billion as DeepSeek prompts questions over AI spending
Published On Jan 27, 2025, 4:07 PM
Nvidia's stock fell nearly 17%, resulting in a $589 billion loss in market capitalization, due to concerns raised by the announcement of a new AI model from the Chinese startup DeepSeek. The model is thought to potentially reduce the cost and energy required for AI training, raising questions about the future demand for Nvidia’s high-performance chips, which have been the backbone of Nvidia’s success in the AI market. Other chipmakers also saw losses, with Broadcom, Micron, and AMD all declining significantly in response to Nvidia's plunge. Analysts expressed varying degrees of skepticism about the sustainability of DeepSeek's cost reduction claims and Nvidia's long-term market position.
Stock Forecasts
NVDA
Negative
Given the significant drop in Nvidia's stock and its influence on the semiconductor sector, there may be continued pressure on NVDA and related stocks as investors reassess AI investment strategies in light of the emerging competition. While Nvidia has been resilient in the past, apprehension surrounding its pricing power and market demand for chips could lead to more volatility.
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