China strikes NVIDIA: The company loses nearly $500 billion in one day
28 January 2025
The stock price of #NVIDIA fell by 13.93%, closing at $118 on January 27, following the success of Chinese startup DeepSeek in artificial intelligence.
The plunge in NVIDIA’s shares was triggered by the rising prominence of DeepSeek, whose AI model R1 surpassed OpenAI in key metrics, raising concerns over the U.S.’s leadership in IT technologies. The market capitalization of companies like NVIDIA dropped by over $1 trillion.
Last week, DeepSeek unveiled an updated model capable of providing reasoning-based answers, while its development costs remain significantly lower than those of competitors. This has raised doubts about the necessity of high investments in AI accelerators. Satya Nadella of Microsoft highlighted the importance of carefully analyzing developments from China.
DeepSeek’s advancements have disrupted the AI market, leading to a sell-off of U.S. tech stocks. Futures on the NASDAQ-100 (#NQ100) fell by 4%, while shares of European and Japanese semiconductor and tech companies also declined.
NVIDIA is facing significant market challenges, which are already impacting its future prospects. However, the demand for innovation may open new avenues for growth.
Our terminal offers 270 trading instruments, including CFDs on indices and stocks with leverage of up to 1:1000. Stay ahead of trends and profit from market shifts.
If you have any questions, don't hesitate to contact us:
- via Online support chat;
- via ticket system in your Personal Area;
- by email info@freshforex.com;
- by filling out special form on the website;
Good luck in trading!
FreshForex — forget other brokers.
