Nvidia's Stock Rebounds After DeepSeek Scare, But AI Chip Market Faces New Challenges

Nvidia stock has clawed almost all the way back from the DeepSeek selloff

Nvidia (NVDA+0.54%) stock extended its rally into a third day, rising more than 1% on Tuesday. The AI chipmaker's shares have now regained about 90% of the ground they lost in panic-selling last month triggered by Chinese startup DeepSeek. At about $140 per share, Nvidia stock is still below its 2025 peak of $153.13, set on Jan. 7. Despite DeepSeek's claims of lower costs to develop AI, new spending plans have since been unveiled worldwide, MarketWatch (NWSA-0.60%) reports, citing Bank of America Securities (BAC-1.42%) analyst Vivek Arya. These include a European Commission plan to mobilize €200 billion for investment, including a €20 billion fund for AI gigafactories. South Korea will buy 10,000 high-performance graphics processing units (GPUs) this year, including Nvidia's H100 and H200 models, to accelerate the launch of a national AI computing center, Yonhap reported Monday, citing Acting President Choi Sang-mok. And given strong demand, pricing for Nvidia's existing chips may remain resilient despite the company's transition to its new Blackwell technology, Barron's reports, citing a note from UBS (UBS+2.13%) analyst Timothy Arcuri. Nvidia stock fell by more than 17% in just one trading day in January amid a global sell-off of tech stocks sparked by the release of China's DeepSeek-R1 reasoning models last week. Nvidia chief executive Jensen Huang saw his net worth plunge by $18 billion as a result of the stock rout. The selloff was so pronounced that Nvidia did unusual damage control. "DeepSeek is an excellent AI advancement and a perfect example of Test Time Scaling," a company spokesperson said in a statement at the time. "DeepSeek's work illustrates how new models can be created using that technique, leveraging widely available models and compute that is fully export control compliant."

NVIDIA stocks have almost fully recovered, 1 month after DeepSeek panic sales

As reported by Yahoo Finance, NVIDIA stocks have regained their value by 90%, following the staggering losses the company suffered after the emergence of Chinese AI startup DeepSeek. The sudden emergence of DeepSeek's low-cost R1 model sent global tech markets into a frenzy, with NVIDIA shedding almost $600 billion in market cap overnight - the single largest one-day loss in stock market history. In addition, responses to DeepSeek wiped an estimated $1 trillion from the broader tech sector, and NVIDIA's CEO Jensen Huang lost $18 billion from his net worth due to the dip. Interestingly, NVIDIA holds 6 of the top 10 spots. (Credit: Statista) However, Huang and NVIDIA shareholders will be pleased to share that stocks are back up to $140 USD, a solid 90% recovery from the losses that shellshocked the company in late January. NVIDIA stocks are still below their all-time peak of $153.13, which was set Jan 7th. Nonetheless, rapid recovery from a historically unprecedented loss paints a bright picture for the AI chipmaker. Following the initial devastation, NVIDIA's PR statements stressed to investors that the emergence of startups like DeepSeek would only emphasize the need for AI chips. Based on the market correction, this statement appears to be true. Worldwide spending plans have been recently announced, including a 200 billion Euro investment from the European Commission and an order of 10,000 GPUs for South Korea. France also announced their plans to enter the global AI race, and worldwide, the demand for NVIDIA chips couldn't be higher.

DeepSeek bubble gone? Nvidia's Jensen Huang has smartly made some investment decisions that have propelled the stock to its early January levels; here they are

Nvidia stock has bounced back to pre-plunge levels after strategic changes in its investment portfolio. The chipmaker reduced its stake in Arm Holdings and made new investments in AI and autonomous vehicle technology firms, attracting positive investor reactions. Nvidia will announce its fourth-quarter earnings after trading hours on February 26.Nvidia stock has staged a remarkable recovery, returning to the level it achieved before the shocking $593 billion January plunge caused by China-based DeepSeek's AI chatbot, as per reports. The company has been able to shore up its shares by making big changes in its portfolio, reported The Street. Nvidia, led by CEO Jensen Huang, has established itself as a leader in the AI chipmaking market. But beyond its core business, Nvidia also manages a smaller investment portfolio. In its most recent SEC filing, Nvidia reported changes to its holdings, one of which involved a sharp decrease in its Arm Holdings, the UK chip designer that Nvidia had earlier tried to buy for $40 billion in 2020, as per The Street. As of the end of 2024, Nvidia's holding in Arm was 1.1 million shares, down 44% from the last quarter. This amounts to approximately $181 million in value, as per the report. Arm is moving more directly into competing in the market by creating and marketing its own processors, something that would place the company directly in competition with big clients such as Nvidia, Apple, and Qualcomm, reported Reuters. JPMorgan analyst Harland Sur pointed out that SoftBank, the largest shareholder of Arm, is planning to invest in the US AI venture Stargate. This move could eventually put Arm in direct competition with Nvidia, as per Reuters. However, Sur suggested that Broadcom might actually stand to benefit the most from these developments, reported Reuters. The company has become a leader in custom AI chips, offering a more cost-effective and efficient alternative to Nvidia's high-powered GPUs. Sur claimed that "With the stepped-up focus on compute efficiency (thanks to DeepSeek), we can see these AI ASIC programs being accelerated to further augment compute efficiency and drive a more aggressive cost/compute curve," as quoted by The Street. In addition to reducing its stake in Arm, Nvidia took some new steps in its investment strategy. According to The Street, the company announced a new investment in China's WeRide, an autonomous vehicle tech leader. Another new investment is in Nebius Group, an AI technology company renamed from Russia's Yandex. As per The Street, Nvidia has shut down past positions in Serve Robotics and SoundCloud, which were both previously included in last year's 13-F reports. The shutdowns indicate strategic rebalancing, with Nvidia focusing more intently on artificial intelligence and self-driving cars, as per the report. Investors appear to be welcoming these changes. Nvidia shares were up 1.9% in premarket trading as investors look ahead to its coming Q4 earnings report, in which analysts project revenues to rise around 66% to $24.5 billion and net income surging 62% to $20.85 billion, according to The Street. What's driving Nvidia's stock recovery? Nvidia has bounced back from its January plunge due to smart moves in its investment portfolio. What are Nvidia's recent investments? Nvidia has made investments in companies like WeRide, a leader in autonomous vehicle technology, and Nebius Group, an AI company.

Nvidia's AI dominance remains intact despite challenges from DeepSeek

Despite concerns over DeepSeek's AI breakthrough, Nvidia's strong industry links and the ongoing demand for AI infrastructure have kept its growth outlook solid.After a $750-billion decline in market capitalisation due to concerns over DeepSeek's AI developments, Nvidia has faced a challenging few weeks. While the Nasdaq has remained steady, the stock has only partially recovered, still standing six per cent below its pre-panic level. A recent report stated concerns that demand for Nvidia's high-end chips may decline. This decline could reportedly be caused by claims from the Chinese AI startup DeepSeek, which has created a sophisticated AI model at a lower computational cost. The report, which appeared in The Wall Street Journal, referenced recent financial results showing that Amazon, Meta, and Alphabet all expect significant increases in capital expenditures for AI infrastructure. Andy Jassy, CEO of Amazon, stated that the company would maintain its partnership with Nvidia for as long as it can foresee. In 2025, Amazon plans to invest over $100-billion, mainly in AI infrastructure. Also Read : Minnesota weather warning: Extreme cold wave advisory issued, schools shut This is encouraging for Nvidia's earnings announcement slated for February 26, the WSJ report added, with its data-centre sector -- housing most of its AI chips and services -- predicted to more than double its revenue to $113 billion for the fiscal year ending in January. The report mentioned that some analysts are concerned that the switch to Nvidia's new Blackwell processor family may cause a brief slowdown in growth, despite high demand. The WSJ report cited FactSet forecasts, which predicted that data-centre revenue would increase by just $2.6 billion in Q4, compared to $4.5 billion in Q1. This would represent the weakest sequential gain since the surge in AI demand began in early 2023. Analysts reportedly anticipate high-volume sales only in the second half of the fiscal year, despite Nvidia CEO Jensen Huang's November statement that Blackwell manufacturing was running at full speed. Due to a "air pocket" in shipments, Evercore ISI's Mark Lipacis has warned that Nvidia's April-ending quarter projection may be worse than anticipated. Despite the decline in its stock price, Nvidia's valuation may ultimately be a boon. Six months ago, the stock was trading at about 40 times expected earnings. Now, it is trading at 32 times, the WSJ report said. Also Read : Post Malone's Europe and UK tour dates announced -- here's how to get tickets Despite improved growth forecasts -- Nvidia's revenue is expected to increase by 53 per cent this year, compared to an average growth of 12.2 per cent for Apple, Microsoft and other tech giants -- it is now cheaper than most of its mega-cap tech counterparts. Nvidia continues to dominate the market despite DeepSeek's rise, as IT behemoths continue to spend billions on AI infrastructure. 1. What caused Nvidia's stock to decline? A $750 billion market capitalisation loss occurred due to concerns that Nvidia's high-end chips would face reduced demand because of DeepSeek's AI developments. 2. How are the major tech companies reacting to Nvidia's dominance in AI? Despite DeepSeek's claims, Amazon, Meta and Alphabet have reaffirmed their strong alliances with Nvidia and increased their investments in AI infrastructure.

Nvidia Shares No Longer Bulletproof as DeepSeek Fears Linger

Nvidia Corp. investors have typically rushed to buy the stock on any dips. But the mood since the DeepSeek-driven rout has been different, signaling that fears of a slowdown in AI spending aren't going away. Nvidia shares slumped 17% in a single day, erasing about $590 billion from the company's market capitalization, after the Chinese AI startup claimed high performance at a lower cost. The stock has since regained some ground, but it's still more than 11% below its January record high. That's despite key customers Amazon.com Inc., Alphabet Inc., Meta Platforms Inc. and Microsoft Corp. planning a combined $300 billion in capital expenditures this year.

Nvidia Revival Marks the End of the Great DeepSeek AI Panic

The Great DeepSeek Panic of January 2025 is officially over. First, big tech shrugged it off, defying fears that the Chinese breakthrough on artificial-intelligence efficiency would provoke a pullback in Silicon Valley's spending plans. And now Nvidia has just about turned around its record-breaking losses from that fateful Monday three weeks ago when it lost almost half a trillion dollars in value.

Nvidia Shares No Longer Bulletproof as DeepSeek Fears Linger

(Bloomberg) -- Nvidia Corp. investors have typically rushed to buy the stock on any dips. But the mood since the DeepSeek-driven rout has been different, signaling that fears of a slowdown in AI spending aren't going away. Nvidia shares slumped 17% in a single day, erasing about $590 billion from the company's market capitalization, after the Chinese AI startup claimed high performance at a lower cost. The stock has since regained some ground, but it's still more than 11% below its January record high. That's despite key customers Amazon.com Inc., Alphabet Inc., Meta Platforms Inc. and Microsoft Corp. planning a combined $300 billion in capital expenditures this year. Dip buyers didn't step in until Nvidia shares had fallen more than 21% from their peak, a phenomenon that's happened only a handful of times in recent years. It points to increasing investor caution about AI spending -- especially because DeepSeek claimed to use fewer chips for its AI model. "There's this underlying concern about when the party is going to end and I think DeepSeek was a wake up call that that may come faster than people think," said Gene Munster, managing partner and cofounder of Deepwater Asset Management. "The psychology within a day shifted from being essentially an impenetrable, bulletproof story to one that can viciously change." The negative sentiment has created a very different setup heading into Nvidia's earnings, due on February 26. Almost every quarterly report in the last two years has been positively anticipated, with shares trading at or near record highs ahead of the results. This time, the company needs to convince investors who may have started to doubt how much further the stock can run. Read: Big Tech's Grip on Market Shows Cracks as Earnings Fall Flat "The negative stock reaction has become the story, and in many ways frames the biggest risk from here," Morgan Stanley analysts led by Joseph Moore wrote in a note last week. With investor sentiment having soured, they wrote that "the cynicism is overwhelming. It remains to be seen if revenue acceleration can mitigate that concern; we think that it can, but it remains a debate." The wobble in investor confidence is occurring as Nvidia comes up against past quarters where it saw exponential growth, making year-over-year comparisons difficult to top. The company is expected to report revenue growth of 73%, down from 94% last quarter and significantly lower than the 265% growth in the same quarter last year, according to estimates compiled by Bloomberg. Of course, some see the negativity around Nvidia shares as a chance to buy. Evercore ISI analysts led by Mark Lipacis added a tactical outperform rating ahead of the results, saying that the DeepSeek selloff creates an opportunity. And, with roughly two weeks to go before results, shares could certainly make up lost ground. Read: AI Is Major Earnings Focus for US Corporates Far Beyond Big Tech The selloff has also likely made Nvidia's valuation more palatable for some investors. The shares are currently trading at about 30 times forward earnings, compared with their five-year average multiple of more than 40 times. Still, with dip buyers not rushing in in a significant way, the shares look precarious ahead of results -- especially if the earnings don't top the ever-high bar investors have for the company. If Nvidia disappoints, the shares will probably be range-bound until the second half, said Ivana Delevska, chief investment officer at SPEAR Invest, adding that concerns around Nvidia's Blackwell chips have also been weighing on investors. The rollout of the highly-anticipated new lineup was slowed down by manufacturing challenges and supply constraints. Even though the company has said Blackwell will drive growth amid strong demand, concerns about costs remain. "People are already a little bit nervous about Blackwell to begin with. Management has been saying that it's on track and everything is great, but for some reason people are not convinced that's the case," said Delevska. "That's probably why you're not seeing the stock bouncing until they report." Tech Chart of the Day Meta shares were edging higher in premarket trading on Wednesday, putting the social media giant on track to extend its record-setting 17-session winning streak. The rally also puts the Facebook-owner's market value the closest its ever been to $2 trillion.