$936b meltdown: Wall Street darling suffers biggest one-day loss in history

Nvidia plunge, fuelled by investor concern about Chinese artificial-intelligence startup DeepSeek, erased a record amount of stock-market value from the world’s largest company.
Nvidia shares tumbled 17 per cent, the biggest drop since March 2020, erasing $US589 billion ($936 billion) from the company’s market capitalisation. That eclipsed the previous record — a 9 per cent drop in September that wiped out about $US279 billion in value — and was the biggest in US stock-market history.
Nvidia has been the biggest beneficiary of the influx in spending on AI because they design semiconductors used in the technology.Credit: Bloomberg
The plunge saw Jensen Huang’s net worth shrink by about $US20 billion. He still has a net worth of over $US100 billion.
The drop rippled through the rest of the market due to how much weight Nvidia has in major indexes. Including Monday’s slump, Nvidia selloffs have caused eight of the top ten biggest one-day drops in the S&P 500 Index, based on market value, according to data compiled by Bloomberg. The S&P 500 fell 1.5 per cent on Monday in New York and the Nasdaq 100 tumbled nearly 3 per cent.
The semiconductor maker led a broader selloff in technology stocks after DeepSeek’s low-cost approach reignited concerns that big US companies have poured too much money into developing artificial intelligence. The Chinese firm appears to provide a comparable performance at a fraction of the price.
The latest AI model of DeepSeek, released last week, is widely seen as competitive with those of OpenAI and Meta. The open-sourced product was founded by quant-fund chief Liang Wenfeng and is now at the top of Apple’s App Store rankings.
DeepSeek’s low-cost approach reignited concerns that big US companies have poured too much money into developing artificial intelligence.Credit: Bloomberg
“Concerns have immediately emerged that it could be a disruptor to the current AI business model, which relies on high end chips and extensive computing power and hence energy,” Jefferies analysts said in a note to clients.
Nvidia has been the biggest beneficiary of the influx in spending on AI because they design semiconductors used in the technology. While that heavy spending looks poised to continue, investors may grow wary of rewarding companies that aren’t showing a sufficient return on the investment.