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The release of a less capital-intensive artificial intelligence model from China’s DeepSeek sent a chill through the U.S. stock market this week, headlined by losses Monday and Wednesday from Nvidia, the Silicon Valley giant which designs most of the pricey semiconductor technology powering the AI revolution.
Nvidia stock ends Wednesday trading down 4% in a turbulent session that wiped out about $130 billion in market value, with earnings reports from top customers Meta, Nvidia and Tesla all due this afternoon all potential catalysts for further movement in the stock.
To recap Nvidia’s whipsaw week: Its market value fell by about $590 billion Monday, rose by roughly $260 billion Tuesday and dropped $130 billion Wednesday.
Wall Street analysts still mostly view the selloff as a overreaction, and Bank of America analysts led by Vivek Arya wrote Wednesday to clients they “view the recent selloff as an enhanced buy opportunity” for Nvidia stock, reaffirming faith in hundreds of billions of dollars of spending this decade in the AI technology which Nvidia designs.
President Donald Trump is considering placing more restrictions on Nvidia’s semiconductor chip sales to China beyond what the Biden administration placed in an effort to limit AI advancement in the Asian country, Bloomberg reported, citing anonymous sources.
It’s unclear if the potentially amped-up controls are directly tied to the DeepSeek fallout — Nvidia said Monday the Chinese AI group fully complied with existing export laws with its use of Nvidia’s technology — though Howard Lutnick, Trump’s pick for Commerce Secretary, laid into DeepSeek at his Wednesday confirmation hearing, saying: “Nvidia’s chips, which they bought tons of, and they found their ways around, drive their DeepSeek model. It’s got to end.”
China accounted for more than 15% of Nvidia’s revenues in its most recent quarter.
Nvidia’s Wall Street woes continued as shares dropped about 5% by midday, bringing the stock’s loss this week back up to nearly 15%.
After mounting a historic comeback Wednesday, Nvidia stock fell again, declining about 3% in the first 10 minutes of regular trading, leading a broader tech slump as the likes of Apple, Microsoft and Tesla all declined roughly 1% apiece.
New York-listed shares of Chinese technology giant Alibaba rise more than 3% in premarket trading, set to open at their highest level since early November.
Alibaba said earlier Wednesday the latest version of its Qwen generative AI model scored better on several performance tests than the models from rivals like DeepSeek, OpenAI and Meta.
