**
Nvidia has faced significant turmoil as its stock value plummets after a major blow to its growth trajectory. The company, once a standout with sky-high valuations and triple-digit stock gains, saw its $595 billion worth of wealth disappear in just one trading day. This drop equals the combined market capitalizations of PepsiCo, McDonald’s, Starbucks, and Target.
Nvidia gained fame in gaming and crypto before surging as AI adoption surged, fueled by its GPU chips. Its 2023 earnings boom saw stock triple, followed by a 2024 surge that took it to over $3 trillion in market value. It topped Apple’s valuation on the S&P 500, with stock representing more than 20% of the index’s gains.
However, Monday’s revelation from Chinese rival DeepSeek raised concerns about Nvidia’s dominance. Using less computing power for AI capabilities similar to ChatGPT has shaken investor confidence, prompting a significant sell-off and capping further growth.
Nvidia’s rise began in 1999 with GPUs that transformed the gaming industry and later became staples of AI applications like car technology and content personalization. Huang emphasized AI as the next industrial revolution, highlighting Nvidia’s pivotal role in this transformation.
Despite its dominance, the market now questions whether Nvidia can sustain its lead against DeepSeek, a competitor offering similar AI capabilities at a lower cost. While some see this as an opportunity for cheaper investments, others believe the AI wave will continue, driving demand and supply issues forward.
In summary, Nvidia’s recent drop highlights both its peak valuation and the evolving challenges in the AI sector, with new competition raising questions about its sustained dominance.
Source: https://apnews.com/article/nvidia-stock-ai-deepseek-wall-street-5ef5329d2a864f7f733f7e8984366238