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Stock Market Today: Nasdaq Composite Crashes - How Far Will NVIDIA (NVDA) Drop Today?
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Technology Stocks Rising Today
While NVIDIA (Nasdaq: NVDA) is down 17% today, many stocks across technology are rallying. Let’s take a look at a few notable stocks:
- Apple (Nasdaq: AAPL):Is up nearly 4% today. Apple has pursued a strategy of keeping AI computing on device. After the announcements from Deep Seek that make models much more efficient, Apple’s strategy looks more sound.
- Salesforce (Nasdaq: CRM): Is up nearly 5% today. The company is one of the leading names around the growth of ‘agents,’ which could benefit from significantly lower computing costs as Deep Seek’s advancements are replicated by other AI models.
More Thoughts On Deep Seek
We’re continuing to compile reactions to Deep Seek from across the investing and technology world.
Let’s look at what Andrej Karpathy, the former director of AI had Tesla had to say.
As some background, on December 26th Andrej commented on how efficient DeepSeek V3 model was. While the world is reacting in an outsized way to R1 today, Andrej was ahead of the curve recognizing the breakthroughs being pioneered by DeepSeek.
Here’s some highlights from his commentary today:
- “I will say that Deep Learning has a legendary ravenous appetite for compute, like no other algorithm that has ever been developed in AI. You may not always be utilizing it fully but I would never bet against compute as the upper bound for achievable intelligence in the long run.”
- “Data has historically been seen as a separate category from compute, but even data is downstream of compute to a large extent – you can spend compute to create data. Tons of it.”
One reading of Andrej’s thoughts would be that while the near-term could be rocky for many of the computing infrastructure stocks declining rapidly today, their long-term outlook looks robust.
Sell-Off Keeps Accelerating
NVIDIA hit a low of $117.26 near 11:40 a.m. ET, and is now trading for slightly above $120 per share, down 15.8% on the day.
Overall, AI infrastructure stocks continue to get slammed today as investors fear investment in the space will cool following the breakthroughs pioneered by DeepSeek.
Here’s a stat to illustrate how big today’s sell-off is: NVIDIA’s lost market cap today is larger than the entire Mexican Stock market.
More Reactions from the Tech Space
We’ve been looking at what Wall Street is saying about the release of DeepSeek’s newest models, let’s check what some tech leaders are saying.
Gavin Baker, who is the CIO of Atreides Management, posted a long and thoughtful note about DeepSeek.
Some key takeaways:
- He highlights some of the real breakthroughs in DeepSeek’s new models
- But also notes that access to leading U.S. models and a technique for shrinking them (distillation) is another key factor in DeepSeek’s breakthrough.
- He notes that the biggest consequences of this announcement could be computing moving to the ‘edge’ – which would create a massive upgrade cycle for devices like smartphones.
The entire post is worth a read – we’re now seeing some stocks like Meta Platforms (Nasdaq: META) that were down to begin the day move to the green.
It is very likely DeepSeek’s announcement benefits companies like Meta and other hyperscalers with unique data and distribution advantages.
Where Stocks Are in Early Trading
Let’s take a look at where some notable names levered to the AI buildout are in early trading today:
- NVIDIA (Nasdaq: NVDA): Down 13%
- Broadcom (Nasdaq: AVGO): Down 12.5%
- Vistra (NYSE: VST): Down 24%
- Vertiv (NYSE: VRT): Down 25%
We’ll see where markets trend at the end of the day. Yet, for now, investors appear to be selling first and asking questions later.
More DeepSeek Reactions
Bernstein released a research note on what Deep Seek means for NVIDIA and other AI stocks this morning, let’s look at some of the key takeaways:
- Did DeepSeek Build OpenAI For $5 Million?
Bernstein first addresses DeepSeek’s cost to refute the $5 million number cited in coverage of the model.
Bernstein says:
“There are actually two model families in discussion. The first family is DeepSeek -V3, a Mixture of Experts (MoE) large language model which, through a number of optimizations and clever techniques can provide similar or better performance vs other large foundational models but requires a small reaction of the compute resources to train…
The oft-quoted “$5M” number is calculated by assuming a $2/GPU hour rental price for this infrastructure which is fine, but not really what they did, and does not include all he other costs associated with prior research and experiments on architectures, algorithms, or data…
Overall, our own (semi-informed layperson’s?) reaction is not to buy into the doomsday scenarios currently playing out in the Twitterverse. We continue to like the AI stories in our coverage, particularly NVDA and AVGO (both rated OP).
What About AI Software Companies?
While AI hardware companies are seeing large losses in premarket trading, the efficiency gains from Deep Seek could accelerate adoption from software companies.
So, how are they performing premarket?
Let’s check in on a software stocks with the most to gain if the cost of AI models plummets:
- Salesforce (NYSE: CRM): Down .6% premarket
- ServiceNow (NYSE: NOW): Down .87% premarket
- Snowflake (NYSE: SNOW): Down 2.27% premarket
Clearly the panic hasn’t spread to these stocks and investors may increasingly rotate out of hardware AI stocks and into them in the weeks to come.
Technology stocks are poised to see painful drops across the board on Monday. As of 8:20 a.m. ET, here’s where major indexes are trading in premarket:
- Dow Jones Industrial Average: Down 328 (-.74%)
- S&P 500: Down 128.75 (-2.10%)
- Nasdaq Futures: Down 795.50 (-3.61%)
As you can see, the closer indexes get to being heavily invested in technology, their losses accelerate. The primary cause for these sell-offs is an increasing market panic around DeepSeek, which has created a family of artificial intelligence models that are highly efficient.
Let’s dive deeper into today’s biggest news, look at what companies are dropping, and also see what Wall Street is saying.
What is DeepSeek?
DeepSeek is a Chinese LLM firm that released new models and submitted a paper on their R1 model last week. The headline figure that caught most of the media’s attention is DeepSeek’s accounting, which shows that R1’s training run used only 2,048 NVIDIA GPUs and cost less than $6 million.
The $6 million figure is just the marginal cost for a training run (so it doesn’t show the true cost to develop a cutting-edge model). However, DeepSeek R1 does contain a number of breakthroughs in making AI models more efficient that have caught the broader AI world by surprise. Numbers adjust depending on the metric you’re looking at, but DeepSeek is anywhere from ~20 times more efficient on some metrics (like per token expense on its API) to nearly 50X less expensive in model training costs.
The decreasing cost of using AI should be a good thing in that it will spur significantly more adoption of the technology. You might expect to cause an increase in the price of technology stocks.
Yet, the opposite is happening today. That’s partially due to the massive investment many U.S. companies have made in computing infrastructure. The market is increasingly weary that big tech companies have overspent or are now disadvantaged. Of course, there’s a healthy debate as to the degree this impacts major companies and even whether they’re winners or losers from DeepSeek’s efficiency breakthroughs. We’ll detail some of the bull vs. bear arguments below.
What Stocks Are Decling the Most Today: From NVIDIA to Amazon
The market today will focus mostly on NVIDIA (Nasdaq: NVDA). The company is down 11.5% in premarket trading and is headed to the biggest one-day market capitalization loss from any company.
NVIDIA is most in focus because DeepSeek challenges assumptions around how many GPUs are needed in the years to come. It’s not that NVIDIA is ‘dead,’ but spend on AI infrastructure may cool (see our bull and bear debates in the section below).
NVIDIA is down 11.5% to around $126 per share in premarket trading.
Other infrastructure stocks that rallied last week on announcements like Trump’s $500 billion Stargate plan and Meta Platforms (Nasdaq: META) taking up their spending plans this year will struggle today as well.
- Broadcom (Nasdaq: AVGO): Down 10.9%
- Marvell (Nasdaq: MRVL): Down 11.3%
- Coherent (Nasdaq: COHR): Down 10.4%
Generally, if a stock is involved in the ‘AI infrastructure’ trade, they’re down around 10% in premarket trading. Looking at a wider set of technology stocks, here’s how hyperscalers are faring shortly before market open:
- Amazon (Nasdaq: AMZN): Down 3.1%
- Meta Platforms (Nasdaq: META): Down 2.7%
- Google (Nasdaq: GOOGL): Down 3.4%
- Microsoft (Nasdaq: MSFT): Down 4.3%
Bull vs. Bear: What Wall Street Is Saying About NVIDIA and AI Stocks Today
We’ll keep updating throughout the day, but here’s what Wall Street is saying about leading AI stocks today.
A couple of Wall Street banks defending shares of NVIDIA:
- Citi on NVIDIA (Maintains Price Target of $175): While DeepSeek’s achievement could be groundbreaking, we question the notion that its feats were done without the use of advanced GPUs to fine tune it and/or build the underlying LLMs the final model is based on through the Distillation technique. While the dominance of the US companies on the most advanced AI models could be potentially challenged, that said, we estimate that in an inevitably more restrictive environment, US’ access to more advanced chips is an advantage. Thus, we don’t expect leading AI companies would move away from more advanced GPUs which provide more attractive $/TFLOPs at scale. We see the recent AI capex announcements like Stargate as a nod to the need for advanced chips.
- Cantor Fitzgerald on NVIDIA (Maintains Price Target of $200): The announcement is actually very bullish with AGI seemingly closer to reality and Jevons Paradox almost certainly leading to the AI industry wanting more compute, not less. We would be buyers of NVDA shares on any potential weakness.
On the more negative end of reactions:
- Raymond James: Questions whether the need for large GPU training clusters is needed moving forward.
- Jefferies: Believes that 2026 AI capital expenditures could be under pressure.
- JPMorgan: Worried that the AI investment cycle has become too hyped.
Once again, we’ll continue updating this live blog throughout the day as reactions continue pouring in from across Wall Street and the broader investment world.
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