Nvidia Plunges to 3rd, Loses $500B to DeepSeek AI Surge

Shares of Nvidia took a dramatic hit on Monday, marking the company’s worst day since the global market sell-off triggered by the coronavirus pandemic in March 2020. This comes as we posted hours ago that the American AI giant became the most valuable company in the world by market cap but as it is now, Apple is back at number with a market cap of $3.4 trillion. 

The drop occurred amidst a widespread tech stock sell-off driven by concerns about America’s leadership in the AI sector, sparked by the advancements claimed by Chinese AI startup, DeepSeek. Nvidia’s shares, a significant beneficiary of the AI boom, fell as much as 18%, pushing its market value below $3 trillion. Despite this plunge, Nvidia’s shares are still up more than 480% over the past two years.

However, the company’s losses on Monday were staggering, with over $520 billion in market value wiped out. If Nvidia’s shares close at this level, it will be the biggest market value drop in U.S. stock market history, nearly double the previous record of $279 billion set by Nvidia itself in September 2024.

To put this in perspective, the amount of market value lost by Nvidia on Monday exceeds the entire market value of companies such as Exxon Mobil, Costco, Home Depot, or Bank of America.

Thanks to the AI-driven surge in mega-cap tech stocks, Nvidia catapulted into the top five most valuable companies in the world in 2023. The company even surpassed tech giants like Alphabet, Microsoft, and Apple, reaching a peak market value of $3.7 trillion. However, Monday’s losses have now brought Nvidia’s value down to around $2.8 trillion, allowing Apple to reclaim the title of the world’s most valuable company.

It’s not just Nvidia feeling the impact. The company’s drop also dragged the Dow Jones Industrial Average down by more than 130 points. Nvidia, which joined the prestigious 30-stock index in November, replacing rival chipmaker Intel, saw its losses extend to the broader tech sector. The Nasdaq Composite, which closely tracks publicly traded tech companies, slid around 3%.

The global tech stock sell-off also meant that the S&P Technology sector fell into the red for the year so far, making it the only sector with a year-to-date decline.