Investors dump tech stocks after record $593 billion Nvidia loss

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Investors dump tech stocks after record $593 billion Nvidia loss

Nvidia CEO Jensen Huang speaks during Hon Hai Tech Day in Taipei, Taiwan, on Oct.18, 2023. Nvidia, the chipmaker at the center of an expected AI boom, sank nearly 17 percent, slicing off some $589 billion in market value on Jan. 27, 2025. [YONHAP]

Nvidia CEO Jensen Huang speaks during Hon Hai Tech Day in Taipei, Taiwan, on Oct.18, 2023. Nvidia, the chipmaker at the center of an expected AI boom, sank nearly 17 percent, slicing off some $589 billion in market value on Jan. 27, 2025. [YONHAP]

 
Global investors dumped tech stocks on Monday, worried that the emergence of a low-cost Chinese artificial intelligence model would threaten the dominance of leaders like Nvidia, evaporating $593 billion of the chipmaker's market value, a record one-day loss for a Wall Street company.
 
Last week, Chinese startup DeepSeek launched a free AI assistant that it says uses less data at a fraction of the cost of incumbent services. By Monday, the assistant had overtaken U.S. rival ChatGPT in downloads from Apple's app store.
 
This led the tech-heavy Nasdaq to fall 3.1 percent on Monday. Nvidia was the Nasdaq's biggest drag, with its shares tumbling just under 17 percent and marking a record one-day loss in market capitalization for a Wall Street stock, according to LSEG data.
 
Nvidia's market-cap loss on Monday was more than double the previous one-day record, which the chipmaker set last September.
 

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The Nasdaq's next-biggest drag was chipmaker Broadcom, which finished down 17.4 percent, followed by ChatGPT backer Microsoft, which fell 2.1 percent and Google parent Alphabet, which ended down 4.2 percent.
 
The Philadelphia semiconductor index tumbled 9.2 percent in its biggest percentage drop since March 2020. Its biggest decliner was Marvell, which tumbled 19.1 percent.
 
U.S. equity declines followed a selloff that started in Asia, with Japan's SoftBank Group finishing down 8.3 percent, and moved through Europe where ASML fell 7 percent.
 
"If it’s true that DeepSeek is the proverbial 'better mousetrap,' that could disrupt the entire AI narrative that has helped drive the markets over the last two years," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
 
"It could mean less demand for chips, less need for a massive build-out of power production to fuel the models, and less need for large-scale data centers."
 
The hype around AI has powered a huge inflow of capital into equities in the last 18 months, inflating valuations and lifting stock markets to new highs.
 
Reuters 
 
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