Nvidia Loses $600 Billion in Market Cap Amid AI Competition
Key Points
* Nvidia stock plummeted over 17% on Monday due to concerns over DeepSeek AI model.
* Retail investors stepped in with a record $562 million inflow on Monday.
* Wall Street analysts largely support investors' bullish outlook.
Overview
Nvidia (NVDA) stock experienced a significant sell-off on Monday, losing nearly $600 billion in market capitalization. Investors raised concerns over DeepSeek, a Chinese startup developing a cost-effective AI model using cheaper chips and less data.
Retail Investors Buy the Dip
Despite the sell-off, retail investors flocked to Nvidia shares. VandaTrack data shows a massive inflow of $562 million on Monday, the highest single-day purchase in their records. As the stock rebounded on Tuesday, another $360 million was bought, totaling over $920 million in two days.
Wall Street's Optimism
Wall Street strategists largely agreed with retail investors' optimism. Tom Lee of Fundstrat believes it's an opportunity to "buy the dip," while Vivek Arya of Bank of America sees an "enhanced buying opportunity."
DeepSeek's Impact
DeepSeek's AI model raised concerns about competition for Nvidia's AI chip sales and the dominance of US hyperscalers. However, Bernstein analyst Stacy Rasgon dismissed the sell-off as "overblown," arguing that it does not indicate a downfall for AI infrastructure.
Conclusion
Nvidia's recent stock volatility highlights the evolving landscape of AI technology and the significant impact of retail investors in the market. While DeepSeek remains a potential threat, Wall Street analysts remain bullish on Nvidia, supported by strong retail demand.