Nvidia’s Shocking $600 Billion Market Cap Loss
In what is now the biggest one-day loss in U.S. history, Nvidia’s market cap plummeted by nearly $600 billion on Monday. The tech giant saw its stock drop by 17%, closing at just $118.58 per share. This massive sell-off marks Nvidia’s worst day in the market since March 2020, when the COVID-19 pandemic sent shockwaves through the global economy.
After a stunning 239% surge in 2023 and a 171% jump in 2024, Nvidia had recently overtaken Apple to become the world’s most valuable publicly traded company. However, this sharp decline has now knocked it down to third place, behind Apple and Microsoft.
What Triggered the Collapse?
The drastic fall in Nvidia’s stock can be traced to growing concerns over new competition in the rapidly expanding field of artificial intelligence (AI). A key player in this is DeepSeek, a Chinese AI lab that has stirred up the tech world by unveiling a free, open-source large language model. DeepSeek claims it took just two months and a mere $6 million to create the model, using Nvidia’s H800 chips—a cheaper, lower-capability version of the company’s flagship GPUs (graphics processing units).
Nvidia has long dominated the AI data center chip market, with tech giants like Alphabet, Meta, and Amazon heavily relying on Nvidia’s GPUs to power their AI models. DeepSeek’s breakthrough, however, has raised alarms that it could chip away at Nvidia’s market share, as companies might start to look for more affordable options.
The Ripple Effect: Nvidia’s Losses and the Broader Tech Sector
The Nvidia sell-off didn’t just hurt the company itself. It sent shockwaves through the entire U.S. tech sector, with a broad decline in stock prices. Companies that depend on Nvidia’s chips saw huge drops in their shares, including:
- Dell – Down 8.7%
- Oracle – Down 14%
- Super Micro Computer – Down 8.7%
- Hewlett Packard Enterprise – Down 5.8%
Even Broadcom, another major player in the chip industry that has benefitted from AI’s rise, saw a 17% drop in stock value, losing over $200 billion in market cap in just one day.
DeepSeek: A New Contender in the AI Race
The rise of DeepSeek has raised many eyebrows in the AI industry. The lab’s open-source AI model is seen as a serious challenger to the dominance of U.S. tech companies. Despite recent restrictions on U.S. chip exports to China, DeepSeek’s ability to build a highly efficient AI model with budget-friendly hardware has caused a stir. The model even surpassed OpenAI’s ChatGPT as the most-downloaded free app in the U.S. on Apple’s app store.
The news sent the AI sector into a frenzy, as analysts and investors began worrying that peak demand for Nvidia’s chips might be over. According to a report from Cantor analysts, there’s now fear that DeepSeek’s development could signal the beginning of a shift away from expensive Nvidia GPUs, which many believe could hurt Nvidia’s growth prospects.
Should Investors Be Worried?
Despite the panic, some analysts aren’t so convinced that DeepSeek poses a major threat to Nvidia. They argue that the AI industry is still growing, and demand for compute power—which Nvidia’s GPUs provide—will continue to rise. In fact, they believe that as AI becomes more advanced, compute demand will only increase, making Nvidia’s position in the market more secure.
However, after such a monumental run-up in stock price, it’s not surprising that investors are on edge. The market has been riding high on the AI boom, but any hint of competition or slowing demand can trigger a major sell-off, as seen with Nvidia.
CEO Jensen Huang’s Net Worth Takes a Hit
As a result of the massive drop in Nvidia’s stock price, CEO Jensen Huang also saw his personal fortune shrink dramatically. His net worth took a $21 billion hit, according to Forbes’ real-time billionaire list, dropping him down to 17th place among the world’s richest people.
The loss is particularly significant when you consider that Nvidia is one of the largest companies in the world. The sheer scale of this drop is difficult to wrap your head around—it exceeds the market cap of Coca-Cola, Chevron, and even Netflix combined!
What Does This Mean for the AI Industry?
The rise of DeepSeek represents a pivotal moment in the AI arms race. As venture capitalist David Sacks put it, the development of DeepSeek’s AI model proves that the AI race will be very competitive. Sacks, who was appointed by former President Donald Trump as the White House’s AI czar, argues that the U.S. must stay on its toes to maintain its lead in AI, especially as China ramps up its AI efforts.
Despite the competition, Sacks remains confident in the U.S. tech industry, but warns that complacency could cost American companies their edge in AI. Nvidia’s loss, while dramatic, could be a wake-up call for the entire sector to re-evaluate its strategies and focus on staying ahead of competitors like DeepSeek.
The Future of Nvidia and the AI Market
Looking ahead, Nvidia’s market cap may have taken a massive hit, but the company is not out of the game. Analysts remain largely bullish on Nvidia’s future, believing that its dominance in AI chips is unlikely to be replaced anytime soon. The growing demand for AI-powered products and data center services will likely continue to fuel Nvidia’s growth, even in the face of new competition.
In fact, despite the recent setback, Nvidia’s valuation is still sky-high. The company is one of the most valuable tech firms in the world and remains a leader in AI hardware. Its powerful GPUs continue to be essential for training and deploying AI models across the globe.
Conclusion: Is Nvidia’s AI Dominance Over?
In the end, Nvidia’s sudden loss of $600 billion in market cap is a wake-up call for both the company and the entire tech sector. While competition from DeepSeek is undoubtedly a concern, the broader trend of growing AI demand still positions Nvidia as a key player in the industry. The company’s focus on AI advancements and innovative technology will likely help it weather this storm, but investors are clearly on edge, and the market is reacting with caution.
For now, Nvidia remains the king of AI chips—but the rise of DeepSeek and other competitors shows that the race for AI dominance is far from over.

I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.