Nvidia sheds almost $600 billion in market cap, biggest one-day loss in U.S. history

Nvidia experienced a historic market cap loss of nearly $600 billion, the largest single-day drop for any U.S. company, as its stock plummeted 17% to $118.58. This decline followed Nvidia's recent achievement of becoming the most valuable publicly traded company, surpassing Apple. The selloff was triggered by concerns over increased competition from Chinese AI lab DeepSeek, which recently unveiled a free, open-source large language model. DeepSeek's model, developed using Nvidia's H800 chips, has raised fears of reduced demand for Nvidia's GPUs, which are crucial for AI data centers in the U.S. The Nasdaq fell 3.1% amid the tech selloff, with Broadcom, Dell, Hewlett Packard Enterprise, Super Micro Computer, and Oracle also seeing significant declines.

Despite the market's reaction, analysts at Cantor remain optimistic about Nvidia's prospects, suggesting that advancements in AI will drive increased demand for compute power. Nvidia's stock had previously surged 239% in 2023 and 171% the prior year, contributing to market sensitivity over potential spending pullbacks. The excitement around DeepSeek's model, which surpassed OpenAI's ChatGPT as the most-downloaded free app on Apple's App Store, comes amid U.S. export restrictions on chips to China. Nvidia is now the third most-valuable public company, trailing Apple and Microsoft, while CEO Jensen Huang's net worth dropped by approximately $21 billion, placing him 17th on Forbes' richest-person list.

Key takeaways

Nvidia experienced a historic market cap loss of nearly $600 billion, driven by competition concerns from Chinese AI lab DeepSeek.
DeepSeek's new open-source AI model, built with Nvidia's H800 chips, has intensified fears of reduced demand for Nvidia's GPUs.
The selloff affected other tech companies, with Broadcom losing $200 billion in market cap and data center companies like Dell and Oracle also seeing significant declines.
Despite the market reaction, analysts believe AI advancements will increase demand for compute power, suggesting Nvidia's long-term prospects remain strong.

Nvidia sheds almost $600 billion in market cap, biggest one-day loss in U.S. history

Key takeaways

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