The stock market's reaction to the release of China's novel artificial intelligence (AI) model DeepSeek has been both bearish and violent as it saw the shares of many major players in the sector – most notably Nvidia (NASDAQ: NVDA) – swiftly plummet.
The chip maker got a shout out from Amazon CEO Andy Jassy on a fourth-quarter earnings call with analysts.
It's been a rocky year for Nvidia (NVDA 3.08%) investors. After soaring to new heights, the chipmaker was taken out behind the woodshed and soundly thrashed, at one point losing as much as 22% of its value.
Robinhood, NVIDIA, Visa and Interactive Brokers are included in this Analyst Blog.
In the A.I. trade, Logan Gilland believes hardware is on its way out, and software will become the primary tech play.
NVIDIA Corporation NVDA was one of several technology stocks hit by the emergence of Chinese AI competitor DeepSeek.
There remains a gap between Nvidia Corp (NASDAQ:NVDA, ETR:NVD)'s revenue forecast and the planned capital expenditure (capex) of major hyperscalers but this gap has narrowed slightly as capex expectations for 2025 have increased, analysts at UBS believe. Large cloud service providers like Meta, Alphabet, Amazon and Microsoft have raised their capex expectations for 2025 from $293 billion to $303 billion since the start of the year.
Nvidia's (NVDA 5.21%) stock has been beaten down over the past two weeks thanks to the release of DeepSeek's efficient generative AI model. Because DeepSeek reportedly trained its artificial intelligence (AI) model for less than $6 million, many investors are assuming that companies like Nvidia that supply this computing power are in trouble, as the AI hyperscalers won't spend as much because more efficient computing methods are possible.
Nvidia (NASDAQ: NVDA) has been facing stock market turbulence since the start of 2025 as it started the year with a climb above $149, quickly fell toward $131, and then again aimed at highs above $147 only to collapse below $120 and threaten a deeper plunge below $100.
Shares in the AI chip maker rose 5% Wednesday and was up again early Thursday as Big Tech's spending plans remained in focus.
Shares of the GraniteShares 2x Long NVDA Daily ETF (NVDL 10.47%) fund crashed hard in January 2025. The leveraged exchange-traded fund (ETF) fell 26.1% last month, according to data from S&P Global Market Intelligence.
If China's DeepSeek AI efficiency claims are to be believed, NVIDIA (NASDAQ: NVDA) may suffer a substantial valuation reset with reduced demand for GPUs.