A historic opportunity to buy the dip on the "AI chip giant"? Retail investors are flocking to NVIDIA against the trend, with record-scale buying

According to the Zhitong Finance APP, after the launch of the open-source AI large model by the Chinese AI startup DeepSeek, characterized by "extremely low training/inference costs + ultra-high performance," raised concerns in the U.S. tech stock market, NVIDIA (NVDA.US), known as the "AI chip leader" and "the most important stock on Earth," saw its stock price plummet over 17% on Monday, with a market value evaporating by $593 billion, marking the largest market value loss in U.S. stock market history, breaking the previous record. However, retail investors in the U.S. stock market set a record by buying NVIDIA shares on the same day.

Focusing on retail fund flows, the latest statistics from Vanda Research show that retail investors net bought NVIDIA shares totaling $562.2 million on Monday, the highest level since Vanda Research began tracking in 2014. In recent years, retail investors in the U.S. stock market have been continuously buying NVIDIA shares. According to data compiled by this New York market research and analysis firm, retail investors purchased approximately $7.3 billion worth of NVIDIA shares in the last quarter, which is nearly half of the quarterly purchase peak set in September 2024.

Although global tech stocks rebounded on Tuesday, the market remained very fragile after the emergence of DeepSeek's low-cost AI large model raised investors' doubts about the extremely high valuations and dominance of leading AI companies in the U.S.

In terms of the short-term outlook for the tech stock market, investors are concerned that the "low-cost AI large model computing paradigm" led by DeepSeek will prompt tech giants to significantly cut AI GPU orders in the short to medium term. Meanwhile, the "low-cost computing wave" led by DeepSeek has already caused investors to begin questioning the rationality of spending by major U.S. AI companies. If these tech giants' substantial investments in AI still fail to generate satisfactory revenue and profits, as well as performance data exceeding market expectations, a "tech stock sell-off wave" larger than last summer's may occur.

OpenAI CEO supports AI computing demand! Is the long-term outlook for AI chip stocks like NVIDIA still very optimistic?

However, the bullish sentiment for AI computing infrastructure stocks—such as NVIDIA and other AI chip stocks—remains very strong. Currently, developers around the world are trying out DeepSeek's software and hope to use it to build various AI tools, which may accelerate the adoption scale of advanced AI inference models. Therefore, DeepSeek's cloud infrastructure may face challenges in AI computing power due to its sudden popularity, and as low-cost computing AI large models rapidly flow into enterprise software applications, consumer electronics, PCs, and robotics, AI computing power is bound to increase—this is why some bulls in AI chip stocks like NVIDIA and Broadcom firmly believe that the demand for AI computing infrastructure will be much greater in the long term, and the long-term outlook for AI chip stocks like NVIDIA remains tilted towards a "long-term bull market."

Despite the market's violent fluctuations triggered by DeepSeek's low-cost AI model, especially the sharp decline in NVIDIA's stock price, retail investors have been buying against the trend during this turmoil, demonstrating the strong confidence of most investors in NVIDIA's future prospects At the same time, OpenAI CEO Sam Altman recognized DeepSeek's performance and vowed to launch "better models," further fueling market expectations for advancements in AI technology.

Altman stated on social media platform X: "DeepSeek's reasoning large model R1 is an impressive model, especially considering its cost-effectiveness. Clearly, we will launch better models. The addition of new competitors is truly exciting." He also emphasized that as AI technology advances, the demand for artificial intelligence computing power will be more important than ever, and Altman's latest remarks are undoubtedly a long-term positive for computing power providers like NVIDIA.

Although DeepSeek's low-cost model has raised questions about the rationality of AI capital expenditures in the market, analysts from institutions like Goldman Sachs believe that the long-term growth trend of the AI industry remains unchanged. Goldman Sachs analysts pointed out that DeepSeek's rise could promote further popularization of AI technology, especially in the context of improved reasoning efficiency, where the demand for computing power remains strong.

Meanwhile, Bank of America Merrill Lynch put forward an intriguing viewpoint: if DeepSeek's technology can truly reduce the cost of AI reasoning, Apple will benefit in the long term from its advantages in edge AI technology, becoming the ultimate choice with "LLM (large language model) in your pocket." Bank of America Merrill Lynch analyst Wamsi Mohan and his team noted that Apple's strategy focuses on improving user experience through edge AI rather than relying entirely on cloud-based LLMs. This strategy gives Apple a significant advantage in privacy protection and instant response, especially with the integration of Apple Intelligence in devices like the iPhone, iPad, Mac, and Apple Vision Pro.

Bank of America Merrill Lynch believes that DeepSeek's technological breakthroughs will significantly reduce AI reasoning costs, enhance reasoning quality and speed, which will benefit edge AI applications the most. Apple is expected to further enhance user experience by optimizing edge AI applications and integrating more AI features into its products, thereby gaining a more favorable position in future market competition.

As a global leader in AI GPU manufacturing, NVIDIA, despite facing fluctuations in the AI computing infrastructure market in the short term, has not shaken its core position in this market. The market generally believes that as generative AI driven by "low-cost + high-efficiency large models" becomes widely popular in application software and edge computing, the demand for AI computing power will continue to grow significantly, and NVIDIA is expected to benefit greatly from this.

DeepSeek's success also indicates that competition in the AI industry is intensifying, which will drive more AI product innovations and "AI integration into everything," ultimately further expanding the scale of the AI infrastructure market.

Wall Street institutions like Goldman Sachs and Citigroup, which are bullish on NVIDIA's prospects, stated that although DeepSeek's low-cost model has caused short-term market fluctuations, from a long-term perspective, advancements in AI technology and the continuous growth of computing power demand will continue to drive the market capitalization expansion of tech giants like NVIDIA. Meanwhile, Bank of America stated that tech companies like Apple are expected to occupy an important position in the future AI market through the advantages of edge AI technology, thus the outlook for AI computing power demand remains bright in the context of widespread AI application