Nvidia CEO's Net Worth Declines, But Tech Stocks Rebound After DeepSeek Concerns Allay
Nvidia CEO Jensen Huang's net worth plummeted from $121 billion to an estimated $100 billion on Monday, according to the Bloomberg Billionaires Index. However, the company's stock surged nearly 9% on Tuesday, a day after suffering its largest-ever single-day market capitalization loss.
Major market indices also reversed their downward trend after a tech-led selloff on Monday. Investors had been closely monitoring the situation surrounding DeepSeek, an AI tool from a Chinese startup that rivaled U.S. technology offerings at a significantly lower cost.
Investors initially fled tech stocks due to concerns that DeepSeek's capabilities would challenge Wall Street's dominance in AI. However, by Tuesday, many began to view the reaction as an overreaction.
"American AI hyperscalers are still fantastic companies," said Robert Teeter, chief investment strategist at Silvercrest Asset Management. He believes that DeepSeek's discounted offerings may ultimately lead to broader adoption of AI and enhanced productivity.
Meanwhile, Gene Munster of Deepwater Asset Management expressed skepticism about DeepSeek's ability to maintain its low spending levels for developing advanced AI.
Investors are also preparing for mega-cap tech earnings reports from Tesla, Microsoft, and Meta scheduled for Wednesday. There is optimism that these companies will provide reassuring comments on AI, hardware, and capital expenditure spending, driving stock market gains.
Semiconductor firms, which suffered heavily on Monday, generally rebounded alongside Nvidia. Broadcom and Oracle rose by approximately 3% and 4%, respectively.
Bond yields also increased, reversing a previous downtrend caused by investors seeking safe-haven assets amid tech-related risks. The 10-year Treasury yield climbed to 4.538%.