NVIDIA Shares Rebound After DeepSeek Sell-Off Sparks Market Jitters

NVIDIA (NASDAQ: NVDA) shares surged 8.8% Tuesday, recovering from a sharp sell-off linked to DeepSeek’s claims, which wiped $589 billion off the AI chip giant's market value. The rebound came as Wall Street analysts rallied to defend NVIDIA, urging investors to seize this buying opportunity.

DeepSeek, a Chinese AI startup, caused ripples Monday by claiming it built its advanced AI model for under $6 million, challenging industry heavyweights like OpenAI, Google, Microsoft, and Tesla. The announcement drew comparisons to “AI’s Sputnik moment” by Marc Andreessen, but skepticism emerged about DeepSeek’s reliance on NVIDIA’s Hopper GPUs, estimated at nearly $2 billion, and Meta’s Llama models, which also demand significant investment.

Wedbush analyst Dan Ives dismissed the sell-off as an overreaction, labeling it a "golden buying opportunity." Tigress Financial’s Ivan Feinseth upgraded NVIDIA to “Strong Buy” with a 12-month price target of $220, citing the company’s dominance in AI development and robust cash flow growth. He called the dip a strategic entry point for investors.

Morgan Stanley analyst Joseph Moore acknowledged DeepSeek’s innovative approach but viewed its market impact as limited, noting NVIDIA’s strong pipeline with upcoming Blackwell GPUs. Moore, however, trimmed his price target to $152–$166, citing short-term demand softness due to delayed Hopper orders.

Despite Monday’s 17% drop, NVIDIA remains a cornerstone of the AI sector, with shares up 94% year-over-year. Analysts agree that NVIDIA’s leadership in AI infrastructure and continued innovation will drive sustained growth, positioning it to capitalize on the ongoing AI adoption wave across industries.

Investors are now closely watching NVIDIA’s next moves amid the evolving competitive landscape.