As of January 28, 2025, Nvidia Corp. has experienced a dramatic decline in its stock price, plummeting 16.9% in just one day, contributing to a broader downturn in the tech sector. This significant drop coincided with the introduction of a competitive large language model by the Chinese company DeepSeek, which has raised concerns about Nvidia's dominance in the AI market [5ee3d9ba].
On January 27, Wall Street saw substantial declines, with the S&P 500 falling by 1.5% and the Nasdaq Composite dropping 3.1%, marking its worst loss in over a month. The tech sector's overall decline was the largest since September 2020, with a 5.6% drop [5ee3d9ba]. Nvidia's market value decreased significantly, losing more than the combined value of major retailers Home Depot and Lowe's. In a related note, Oracle CEO Larry Ellison saw a staggering loss of $27.6 billion in net worth due to the market's reaction [5ee3d9ba].
The rise of DeepSeek, whose app quickly reached the top of Apple's App Store, has sparked skepticism about the future of AI technology and Nvidia's position within it. Analysts have expressed doubts about DeepSeek's ability to circumvent U.S. chip restrictions, suggesting that the impact of its advancements may be overstated, which could lead to new investment opportunities in the tech sector [5ee3d9ba].
In addition to these developments, Nvidia's recent struggles have been compounded by increasing competition from Japanese semiconductor firms, particularly Advantest, which has regained its leadership in the chip testing equipment market. This shift in dynamics has further strained Nvidia's market position as it faces challenges on multiple fronts [19822e85].
As investors continue to navigate these turbulent waters, the overall market remains volatile, with the Dow Jones Industrial Average managing to rise by 289 points, or 0.7%, amidst the chaos [5ee3d9ba]. The evolving landscape of the tech industry suggests that companies like Advantest and DeepSeek may capitalize on Nvidia's current challenges, potentially reshaping competitive dynamics in the sector [01df7058]. Upcoming earnings reports from major companies like Apple and Microsoft may also influence future market movements, as investors shift towards safer bonds, reflected in the decrease of the 10-year Treasury yield from 4.62% to 4.52% [5ee3d9ba].