After Its Historic $590B DeepSeek Plunge, Is It Safe to Buy Nvidia Stock?

Nvidia (NVDA) stock collapsed by nearly 17% on Monday, as investors panicked over the threat of a cheaper, more efficient Chinese chatbot model called DeepSeek. Given NVDA’s massive size, that translated to a market cap loss of approximately $592.9 billion - the largest single-day drop in history by any company, with Nvidia breaking its own previous record from last August.

DeepSeek is actually challenging quite a few leading U.S. tech giants with its cost-effective AI models. The Chinese startup’s rise to the top of Apple’s (AAPL) App Store over the weekend helped trigger a significant sell-off in mega-cap AI stocks on Monday, led by Nvidia, as DeepSeek's approach suggests that high-cost infrastructure may not be necessary for competitive AI development. 

Today, though, NVDA paced the rebound with a gain of more than 8%, recovering quickly from Monday’s rare breach of its rising 200-day moving average.

Longer term, Nvidia stock is still up 109% over the past 52 weeks, easily outperforming the broader market. Over the past two years, the AI chip giant has returned more than 500% to shareholders.

And retail investors are still very willing to buy the dip in NVDA stock, despite concerns over the threat from DeepSeek. In fact, Interactive Brokers Chief Strategist Steve Sosnick cited a “preponderance of net buying activity” and “tremendous dip buying” on Nvidia shares, which fell briefly today to prices not seen since early October.

Analysts also remain bullish on NVDA, with most viewing the DeepSeek sell-off as a buying opportunity. Earlier today, JPMorgan reiterated “Overweight” ratings on Nvidia, Marvell Technology (MRVL), and Broadcom (AVGO) following Monday’s AI chip stock rout.

In a note, analyst Christopher Danely explained, “Given Deepseek is based on leveraging cloud service providers [Meta] and AI is still in its infancy, we lean towards the argument of continued strong growth in AI spending.” And even in the event of a potential slowdown, Danely believes that Broadcom, Micron (MU), and potentially AMD (AMD) would be most affected - not Nvidia.