Some US$1 trillion (£799 billion) was wiped off European and US artificial intelligence-focused firms' market capitalisations on Monday after China's DeepSeek sparked a global tech sell-off. Nvidia Corp, having dropped as much as 13% at the open, shed US$465 billion off its valuation alone to suffer the largest rout in stock market history, according to Bloomberg.
Stocks are getting crushed this morning. Shares of NVIDIA Corporation NVDA are off by more than 10%.
The CEO of Meta Platforms (META 1.00%) said that the company will be increasing its capital expenditures budget in 2025.
Chinese AI startup DeepSeek is disrupting stock markets around the world. Manus Cranny reports
NVIDIA NASDAQ: NVDA stock plunged more than 10% on news from China AI that rocked the AI world. The launch of DeepSeek raises questions about the cost of computing and NVIDIA's position in the data center and AI industry, but take it with a grain of salt.
Here's an updated market snapshot for today: Company Ticker Change (%) Salesforce Inc CRM +1.55% Apple Inc AAPL +1.28% NVIDIA Corp NVDA -13.58% Microsoft Corporation MSFT -3.35% Vistra Corp VST -24.19% Additionally, the Nasdaq Composite Index is down approximately 3% today, reflecting a broader decline in technology stocks.
When market volatility compresses, as it did over the past five days, seasoned investors and traders should consider what could happen next to bring about a spike in volatility, such as unusual trading volume or options trading activity. This week's volatile event, coming in to end the first month of 2025, comes all the way across the world from Asia's powerhouse.
Jamie Meyers notes the market's big reaction to DeepSeek but believes Nvidia (NVDA) has more than enough business to take the hit. He says the company's diversification is key to its strength.
A few weeks ago, Chinese AI research lab DeepSeek released its open-source AI model, DeepSeek-R1, which has drawn significant attention in the tech world. According to a paper authored by the lab, the DeepSeek-R1 model outperforms cutting-edge models such as OpenAI's o1 and Meta's Llama AI models across multiple benchmarks.
I'm upgrading Nvidia Corporation to “Buy” despite the stock's 11% pre-market drop, viewing the dip as a buying opportunity amid market panic over DeepSeek's AI advancements. DeepSeek's success, using Nvidia's H800 GPUs, highlights Nvidia's critical role in AI, suggesting increased future demand for its GPUs from U.S. tech firms. Nvidia's GPUs remain best-in-class; DeepSeek's breakthrough is more about engineering skill than hardware, potentially driving more investment in AI infrastructure.
Markets have had a case of whiplash in January. Rising bond yields weighed on stocks earlier in the month.
Nvidia Corporation's recent selloff by -13% presents an excellent buying opportunity, with it triggering a high double digits capital appreciation prospect. Despite uncertainties surrounding DeepSeek, it goes without saying that NVDA remains the linchpin to future LLM developments, attributed to its market-leading AI accelerator chips. The Stargate project is likely to rely heavily on NVDA's chips as well, as more hyperscalers guide higher capex and the US intensifies their Sovereign AI strategy.