Nvidia experienced a historic plunge on Monday, shedding nearly $600 billion in market capitalization, the largest single-day loss for any company in U.S. history. The company’s stock dropped 17% to close at $118.58, marking its worst trading day since March 2020. This loss came just days after Nvidia surpassed Apple to become the most valuable publicly traded company.
The decline was driven by concerns over increasing competition in the AI sector. Chinese AI firm DeepSeek recently unveiled a free, open-source large language model built using Nvidia's H800 chips. Despite its limited hardware capabilities, the model gained global attention for its speed and cost-effectiveness. DeepSeek’s innovation has raised fears that demand for Nvidia’s GPUs could peak, leading to a potential pullback in AI spending. However, some analysts remain optimistic, arguing that advancements in AI will ultimately require more computational power, not less.
The market’s reaction was severe. Broadcom, another chipmaker benefiting from the AI boom, also fell 17%, losing $200 billion in market value. Data center giants such as Dell, Hewlett Packard Enterprise, and Super Micro Computer also suffered significant losses. Even Oracle, which is linked to Trump’s AI initiatives, saw its stock decline by 14%.
Nvidia's losses were unprecedented, doubling its previous record of a $279 billion one-day market cap drop in September. CEO Jensen Huang’s personal wealth fell by approximately $21 billion, pushing him to 17th place on the Forbes richest-person list. Meanwhile, DeepSeek’s app surpassed OpenAI’s ChatGPT as the most downloaded app in the U.S., signaling its growing influence despite restrictions on U.S. chip exports to China.
While Nvidia remains the third most valuable public company behind Apple and Microsoft, its historic loss highlights the intensifying competition in the AI sector. Analysts and policymakers alike caution against complacency, emphasizing the need for strategic innovation to maintain the U.S.’s leadership in AI technology.
