‼️NVIDIA recorded the largest market cap loss in the history of financial markets
The company erased an incredible $589 billion in market capitalization on Monday.
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NVIDIA shares plummeted 17% on Monday’s session, the largest percentage drop since the March 2020 crash. The company erased a massive $589 billion in market value, marking the biggest one-day loss among any other stock in history.
To put this into perspective, the previous record in September was 9% and wiped out ~$279 billion in market cap.
As a result, $NVDA is trading below its 200-day moving average for the first time since the beginning of 2023.
Since the peak, the chipmaker market cap has fallen below $2.9 trillion erasing over $700 billion since the peak.
This comes after China's AI startup, DeepSeek said it took them 2 months and less than $6 million to build its AI model.
By comparison, Open AI spent more than $5 billion a year.
China's startup also said it bought 10,000 NVIDIA chips whereas Magnificent 7 has bought a few more times than that. China’s DeepSeek basically claims it has created an AI model that is equally or even more efficient at a much lower cost.
In other words, Magnificent 7 may have overspent in terms of capital expenditures on AI and this does not bode well for their data center revenue and earnings growth.
This may also mean that current market valuations are way too extreme.
We do not know if China's numbers are entirely true and what exactly that could mean for the Magnificent 7 and US technology stocks but the market has already reacted sharply.
Interestingly, the news story count for "DeepSeek" has skyrocketed over the weekend as panic flooded Silicon Valley.
Is this Nvidia's Cisco moment?
During the 2000 Dot-Com Bubble, Cisco, $CSCO, was the most valuable company in the world. The stock subsequently fell over 80% after the bubble burst.
On Friday, the market closed with $NVDA being the most valuable firm on the globe.
History does not repeat but often rhymes.
Is this even possible? This will be extremely interesting to watch.
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