Nvidia is no longer the most valuable company in the world after suffering the biggest stock market decline in history. The semiconductor giant lost over $589 billion in market value on Monday as its shares plunged around 17%. This steep decline erased an amount equal to Netflix’s market cap or the entire GDP of nations such as Ireland, Sweden, or Belgium.
Jensen Huang, Nvidia’s CEO, personally saw $21 billion wiped off his net worth owing to the shares he owns in the company. The losses were triggered by fears over the emergence of a Chinese AI competitor, which poses a serious threat to American rivals at a much lower cost.
NVIDIA Suffers the Most
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DeepSeek’s advances have raised questions about whether the United States can maintain its dominance in the global race for AI development. Last week, the Chinese firm launched its free AI Assistant, claiming it operates with fewer Nvidia chips while being significantly cheaper than current market options.
On Monday, DeepSeek surpassed ChatGPT to become the most-downloaded free app on the U.S. Apple Store.
As it continued to bleed, the tech giant sought to calm investor concerns with a statement released on Monday afternoon. “DeepSeek is an excellent AI advancement and a perfect example of Test Time Scaling,” a spokesperson for the company said in a statement.
They said that DeepSeek’s efforts highlight how new AI models can be developed using this technique, using widely accessible models and computational resources that fully comply with export regulations.
“Inference requires significant numbers of NVIDIA GPUs and high-performance networking,” they added.
Billions Wiped Out of Markets
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The declines in Nvidia’s stock, along with those of other tech companies, had a ripple effect on the broader market. The Nasdaq shed 3%, while the S&P 500 ended the day 1.5% lower.
“Mondays are typically quiet for stocks when markets are at all-time highs, but not today,” Bret Kenwell, eToro US Investment Analyst, told DailyMail.com.
“The AI space can and will continue to evolve, and like we’re seeing today, sometimes those developments will come along quickly. That said, panicking rarely makes for a good investment decision.”
Kenwell said that Monday’s events serve as a reminder for investors to remain focused and maintain a disciplined approach to managing their portfolios. “While owning individual stocks and sectors is fine, having too much exposure or leverage can deal an unexpected blow seemingly out of nowhere – especially on days like today.”
This comes after prominent banker Jamie Dimon warned that the U.S. stock market is overvalued. The market saw gains exceeding 20% in both 2023 and 2024—an impressive milestone not witnessed since the late 1990s.
