The Nvidia company (NVDA) suffered one of its worst days ever on the stock market Monday, falling nearly $600 billion in market cap. The stock was one of the worst movers during Monday’s session, falling nearly 17% before markets closed. Chinese AI startup DeepSeek has all of Wall Street panicking, especially tech investors. As a result, Nvidia and other AI chipmakers have stumbled alongside some of the biggest names in the tech sector.
Nvidia’s stock price plummeted 17% to close at $118.58, while its market cap fell from $3.49T down to just north of $2.9T.
JUST IN: NVIDIA $NVDA loses nearly $600 billion in market cap, marking the largest single-day loss in US history.
— Watcher.Guru (@WatcherGuru) January 27, 2025
The $600 billion single-day dropoff was also the steepest for a U.S. company in history. Data center companies that rely on Nvidia chips also fell, with Dell, Oracle, and Super Micro Computer all falling by at least 8.7%. There is a widespread fear that DeepSeek could challenge the United States’ dominance within the emerging industry. The capabilities of the new free, open-source, large language model have made waves since its December launch. Now, the tech sector is suffering in the stock market, with the biggest AI chipmaker getting hit the hardest.
Also Read: Microsoft Stock (MSFT) Falls 3% Following DeepSeek AI Launch
Nvidia (NVDA) Suffers at the Hands of DeepSeek AI
Analysts at Cantor wrote in a report on Monday that the release of DeepSeek’s latest technology has caused “great angst as to the impact for compute demand, and therefore, fears of peak spending on GPUs.” 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. Additionally, Nvidia’s decline is more than double the market cap of Coca-Cola and Chevron. The drop even exceeds the market value of both Oracle and Netflix, per a CNBC report.
Less than five days ago, Nvidia officially surpassed Apple (AAPL) to become the largest company in the world by market cap. That was no small feat and was driven by the recent US government policy shifts toward the AI sector. Moreover, it increased optimism that the AI chipmaker could be the first company to reach a $4 trillion value. However, Monday showed just how volatile and unforgiving the stock market can be, with the company’s value dropping considerably and marking the worst performance for Nvidia since 2020. Nvidia remains the third most valuable public company, behind Apple and Microsoft. However, before today’s dropoff, it was competing for the top spot.
Also Read: Alphabet (GOOGL) Undervalued? Stock Eyes $700B AI Expansion
DeepSeek’s new AI technology led to a global sell-off that heavily impacted semiconductor firms. Additionally, it has many wondering if the United States will be able to maintain its strength in the AI sector. Microsoft had plummeted 4.1% in premarket trading after its AI investment was called the “best money ever spent.”
