Nvidia’s market cap, currently $3.09 trillion, risks losing $400B if the decline persists, marking a record-breaking single-day loss
The stock price of Nvidia (NVDA) has garnered the attention of investors, experiencing an approximate 12% decline during the pre-market trading session today.
It is noteworthy that the decline occurs within the context of a more extensive downturn in the technology market, as the majority of artificial intelligence stocks are currently trading at a loss.
The substantial selling pressure within the broader technology market arises concurrently with the emergence of inquiries regarding the United States’ dominance in the technology sector, prompted by the Chinese AI startup DeekSeek.
Why Nvidia (NVDA) Stock Price Slipped Today
Nvidia’s significant decline is indicative of the increasing uncertainty within the United States technology sector. The Chinese artificial intelligence startup DeepSeek has introduced a novel model that competes with the products of prominent American technology companies such as OpenAI and Meta.
The model, developed at a significantly reduced cost, has profoundly impacted the industry, prompting inquiries regarding the sustainability of the United States’ preeminence in the technology sector.
Concurrently, DeepSeek’s most recent model, DeepSeek-V3, has reportedly surpassed OpenAI’s latest iteration in evaluations conducted by independent third parties.
A multitude of recent reports has underscored its burgeoning popularity, with the application attaining the highest ranking in Apple’s App Store. This cost-effective innovation is exerting pressure on manufacturers of artificial intelligence chips, including Nvidia, whose stock experienced a decline of nearly 12% in the pre-market trading session.
Nvidia’s stock is not the sole technology entity experiencing volatility. Prominent semiconductor companies ASML and AMD experienced significant declines, with their stock prices plummeting by 4 to 10%.
It is noteworthy that all of these companies have reaped the advantages of the artificial intelligence surge; however, they are now encountering heightened skepticism as a result of competition that emphasizes cost efficiency.
Additionally, various technology and cryptocurrency stocks have experienced a significant downturn today. Concurrently, the emergence of DeepSeek underscores the increasing significance of affordability in the realm of artificial intelligence innovation.
The development cost of $5.6 million is considerably lower than the budgets allocated by major technology corporations in the United States.
Analysts anticipate that this transition may exert heightened pressure on conventional AI chip manufacturers to either reduce costs or enhance innovation, thereby potentially influencing the stock price of Nvidia in the near future.
Furthermore, these developments have raised questions regarding significant artificial intelligence initiatives in the United States, including Donald Trump’s Stargate AI project.
The initiative, involving Oracle, OpenAI, and others, plans a $500 billion investment in American AI infrastructure. Critics argue that the emergence of affordable alternatives like DeepSeek could diminish the project’s relevance.
NVDA Stock Price Slips 12% Raising Market Concerns
Nvidia (NVDA) stock price was down 11.81% and exchanged hands at $125.84 in the pre-market trading session on Monday. If this decline persists, it could potentially erase around $400 billion from Nvidia’s market cap, which currently stands at $3.09 trillion.
It is noteworthy that the stock concluded the previous trading session at a price of $142.62. Concurrently, the significant decline in NVDA stock has adversely affected the cryptocurrency market, particularly precipitating a crash in AI-related coins today.
Besides, this crash also reflects the ever-evolving dynamics in the technology sector. As budget-friendly models disrupt the market, Nvidia may need to adapt its business model or revise its pricing strategies.
The esteemed financial publication, The Kobeissi Letter, has underscored the recent downturn by stating, “DeepSeek is significantly undermining U.S. stocks.”
The report noted that Nasdaq 100 Futures lost 1,000 points, its largest loss since September 2022. Concurrently, should Nvidia experience a decline in its market capitalization amounting to $400 billion, it would represent the most significant single-day loss of a stock in recorded history.
