Nvidia’s Stock Bounces Back: A Resilient Recovery After DeepSeek Shock

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Nvidia’s stock is showing signs of recovery following a tumultuous week triggered by the emergence of DeepSeek, a Chinese AI startup that has raised concerns about the future of AI chip demand.

After experiencing a staggering 17% drop on January 27, which wiped nearly $600 billion off its market capitalization—the largest single-day loss in U.S. corporate history—Nvidia shares rebounded by nearly 9% on January 28, closing at $128.99.

The steep decline was primarily driven by investor fears surrounding DeepSeek’s newly launched AI model, which reportedly performs comparably to existing models at a fraction of the cost.

This development has led to worries that companies like Nvidia, which dominate the AI chip market, may face pressure on pricing and demand as competitors offer more cost-effective solutions. Despite the initial panic, analysts have started to reassess the situation.

Many view the recent pullback as an opportunity to buy Nvidia shares at a lower price. Oppenheimer analysts stated they do not expect significant disruptions for top AI semiconductor companies, including Nvidia, in the near term.

They anticipate that these firms will report positive results in upcoming earnings announcements. Market sentiment appears to be stabilizing, with Nvidia’s shares trading at approximately $129.77 in early trading on January 29.

This recovery aligns with broader trends in technology stocks, which are also rebounding after the initial shock from DeepSeek’s announcement.

While some analysts remain cautious about Nvidia’s long-term outlook, citing potential challenges ahead due to rising competition and changing market dynamics, others express optimism about the company’s ability to adapt and capitalize on ongoing demand for AI technologies.

As investors continue to digest the implications of DeepSeek’s entry into the market, Nvidia remains a pivotal player in the AI chip sector, controlling approximately 80% of the market share.

The coming weeks will be crucial as the company prepares for its next earnings report and seeks to reassure investors about its growth trajectory amidst increasing competition.