Nvidia Rebounds After Monday's Market Rout
Nvidia (NVDA) shares surged nearly 7% on Tuesday, recovering from Monday's massive decline that wiped out nearly $600 billion in market cap.
Monday's Sell-Off
Nvidia's 17% freefall on Monday stemmed from investor concerns over DeepSeek, a Chinese startup that claims to have developed a cost-effective AI model using fewer chips. This raised fears that Nvidia's premium GPU prices could face pressure and semiconductor demand could weaken.
DeepSeek's Impact
DeepSeek's announcements not only affected Nvidia but also the broader market, with the Nasdaq (^IXIC) dropping 3%. Other chip stocks also declined, but some recovered on Tuesday morning.
Nvidia's Response
Despite the market volatility, Nvidia expressed optimism about DeepSeek's AI advancement. However, some Wall Street analysts remain skeptical about DeepSeek's claimed low training costs.
Analyst Commentary
Analysts warn investors to verify DeepSeek's costs thoroughly before drawing conclusions. They believe that despite DeepSeek's breakthrough, AI spending is likely to continue growing.
Conclusion
Investors are advised to stay informed about the latest developments in the AI market as DeepSeek's impact remains uncertain.