Nvidia grabbed headlines for the wrong reasons on Monday when it lost $593 billion to record the largest single-day market cap decline in history. Nvidia stock price closed the day down by 16.86% , setting the pace for other tech giants like TSMC (-13.3%), Broadcom (-17.4%) and Microsoft (-2.14%).
However, Nvidia (NASDAQ: NVDA) bounced back in the pre-market session on Tuesday, as investors digested analysts’ views that DeepSeek’s impact on the AI space is likely overblown. Nvidia stock price was up by 5.1% and traded at $118 at the time of writing.
Why Nvidia Faces A Storm
Chinese startup, DeepSeek, triggered the storm that swept through the tech market, wiping out about $1 trillion. Nvidia stock price is under pressure after DeepSeek’s R1 proved that Large Language Models (LLM) training can be done with great efficiency using cheaper AI GPU chips.
DeepSeek’s breakthrough is an existential threat to Nvidia’s revenue stream, as the latter had thrived in the last two years as a result of its expensive high-performance GPU chips. The company’s CEO, Jensen Huang described the demand for its Blackwell as “insane” late last year, but DeepSeek could disrupt that trajectory.
Tech giants like Alphabet, Meta, Microsoft, Oracle and Amazon have spent tens of billions of US dollars on Nvidia’s chips. Substantial portions have gone toward establishing AI cloud infrastructure and training of LLM models. In addition, the companies had planned to spend even more in 2025. However, DeepSeek’s unraveling will likely see them revise their capex budgets, to the detriment of Nvidia.
Nvidia Stock Price Prediction
The momentum on Nvidia stock price calls for further upside above the pivot mark at $122.80 Immediate hurdle will likely be at $127.10, but an extended control by the buyers could breach that level and potentially test $132.00.
Conversely, the momentum will shift to the downside if NVDA breaks below $122.80. That will likely see the first support come at $120.20 The upside narrative will be invalid if the stock breaks below that level. Also, such a move could strengthen the downward momentum and test the second support at $117.80.
The post Nvidia Stock Price Fairytale Resuscitated As DeepSeek Worries Thaw appeared first in UK on InvestingCube.