Key Takeaways Nvidia shares tumbled Wednesday, dashing hopes for a quick recovery from losses earlier in the week amid concerns about competitiveness of American AI firms and their spending on artificial intelligence.

Nvidia shares' 9% recovery Tuesday was the second-best day in terms of market cap added for any company ever, trailing only a record it set in July.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

The Chinese AI service has Wall Street worried that it will be cheaper than expected to develop models. But as chip stocks sink, some analysts see a silver lining.

Nvidia spoke positively about DeepSeek’s latest AI model, R1, saying it represented “excellent AI advancement.”

Chuck Zodda, managing partner and Chief Investment Officer from the Armstrong Advisory Group discusses the dip of tech stocks, especially Nvidia after the announcement of Chinese AI start-up DeepSeek.

The market reaction proved particularly severe for Nvidia (NASDAQ: NVDA), with shares plummeting and erasing half a trillion in market cap at the time of this writing. To put this staggering figure in perspective,

Nvidia stock declined on Wednesday, even as strong earnings from ASML Holding lifted shares of other chip makers. Shares of Nvidia made a strong 9% comeback Tuesday after a 17% drop on Monday. However,

Chip stocks in the U.S. and Europe rose on Wednesday for a second straight day, recovering from a punishing selloff triggered by China's low-cost DeepSeek artificial intelligence tool at the start of the week.