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Nvidia Shares Plummet Amid Tech Sector Selloff

by January 27, 2025
written by January 27, 2025

On Monday, technology stocks experienced a substantial decline, with Nvidia leading the downturn. The company’s shares fell by over 13% in pre-market trading, a reaction attributed to the unexpected emergence of Chinese artificial intelligence startup DeepSeek. DeepSeek’s introduction of its advanced AI model, R1, has raised concerns among investors about increased competition in the AI sector. 

The Nasdaq 100 futures dropped by 3.3%, reflecting broader apprehension in the tech industry. Other major tech firms also faced declines:

ASML Holding: The Dutch semiconductor equipment maker saw its shares decrease by more than 10% in Amsterdam trading.
SoftBank Group: In Asia, the Japanese conglomerate, known for its tech investments, experienced an 8% drop.
Tokyo Electron: The Japanese semiconductor company reported a 4.9% decline.

DeepSeek’s R1 model, unveiled in a recent paper, demonstrates capabilities comparable to those of established AI leaders like OpenAI but was developed at a fraction of the cost. This development has led to concerns about the sustainability of U.S. dominance in the AI industry. Since its release, the DeepSeek app has become the most downloaded free application on the Apple App Store. 

Russ Mould, investment director at AJ Bell, commented on the situation: “The AI super-race is seeing new challengers emerge, and not everyone is going to win. The companies that enjoyed first-mover advantage will now be under pressure to launch something even better or be left behind.” 

Investors are now closely monitoring the tech sector, evaluating how established companies will respond to new competitors and the potential implications for future innovation and market share.

 

The post Nvidia Shares Plummet Amid Tech Sector Selloff appeared first on FinanceBrokerage.

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