Nearly $600 billion evaporated! NVIDIA set a record for the largest single-day market value loss in U.S. stock history

According to the Zhitong Finance APP, American chip giant NVIDIA (NVDA.US) saw its market value evaporate by nearly $600 billion on Monday, setting a record for the largest single-day market value loss in U.S. stock history.

NVIDIA's stock price plummeted nearly 17%, closing at $118.42, marking the company's largest single-day decline since the onset of the COVID-19 pandemic on March 16, 2020. Just last week, NVIDIA had surpassed Apple (AAPL.US) to become one of the highest-valued publicly traded companies in the world. However, Monday's crash caused NVIDIA to lose that title and triggered a 3.1% drop in the tech-heavy Nasdaq index.

This plunge was primarily driven by market concerns over competitive pressure from China's artificial intelligence lab DeepSeek. At the end of last month, DeepSeek released a free open-source large language model, reportedly developed in just two months at a cost of less than $6 million, using NVIDIA's simplified H800 chip.

NVIDIA's graphics processing units (GPUs) dominate the U.S. AI data center chip market, with tech giants like Alphabet (GOOG.US, GOOGL.US), Meta (META.US), and Amazon (AMZN.US) investing billions of dollars in NVIDIA chips to train and run their AI models. However, analysts at Cantor stated in a report on Monday that DeepSeek's latest technology has raised concerns in the market about declining computing demand and the arrival of peak GPU spending.

Despite this, analysts still recommend buying NVIDIA stock, arguing that such concerns are "completely misguided." They stated that advancements in artificial intelligence could drive an increase in demand for computing power in the AI industry, rather than a decrease.

NVIDIA's crash also affected other chip companies and data center firms. Another U.S. chip company benefiting from the AI market, Broadcom (AVGO.US), saw its stock price drop 17%, resulting in a market value loss of $200 billion. Additionally, data center companies reliant on NVIDIA GPUs for hardware sales, such as Dell (DELL.US), HP (HPQ.US), and Super Micro Computer (SMCI.US), all experienced stock price declines of at least 5.8%. Oracle (ORCL.US), which is involved in former President Trump's latest AI initiative, saw its stock price fall 14%.

For NVIDIA, this market value loss is more than double the $279 billion single-day loss it recorded in September 2023, and it far surpasses the previous record of $232 billion set by Meta in 2022. The scale of NVIDIA's market value loss even exceeds the combined market values of Coca-Cola (KO.US) and Chevron (CVX.US), and is higher than those of Oracle and Netflix (NFLX.US).

NVIDIA CEO Jensen Huang's personal wealth has also taken a hit as a result. According to Forbes' real-time billionaire rankings, Huang's net worth has decreased by approximately $21 billion, dropping him to 17th place on the global billionaire list.

DeepSeek's model garnered significant attention over the weekend, with its application downloads quickly surpassing OpenAI's ChatGPT, becoming the most popular free app on the U.S. Apple App Store Venture capitalist David Sacks stated on social platform X that DeepSeek's model "indicates that the AI competition will become very intense." Sacks supports former President Trump's decision last week to revoke the Biden administration's executive order on AI safety and expressed confidence in maintaining U.S. competitiveness, but also cautioned against complacency.

Currently, NVIDIA's market value has fallen to third place globally, behind Apple and Microsoft