Nasdaq Futures Up After Sell-off; Nvidia Rises After-Hours: What's Moving Markets

The tech-heavy Nasdaq futures rebounded on Tuesday morning, following a steep sell-off fueled by concerns over the emergence of Chinese startup DeepSeek and its implications for the artificial intelligence (AI) trade. Nvidia, a leading AI chipmaker, also saw a significant rise in after-hours trading, indicating a potential shift in investor sentiment.



The sell-off on Monday was driven by fears that DeepSeek's low-cost, open-source AI model could challenge the dominance of U.S. tech companies in the AI space. Nvidia, in particular, suffered a significant loss in market value, with its stock dropping nearly 17% during the regular trading session. This decline resulted in a market cap loss of nearly $600 billion, the largest one-day drop in history for a U.S. company.

However, Nvidia's stock rebounded in after-hours trading, gaining more than 2% as investors appeared to reassess the company's long-term prospects. This shift in sentiment may be attributed to several factors, including Nvidia's strong financial performance and market leadership in AI chips.



Nvidia reported record-breaking revenue and earnings for the third quarter of fiscal 2025, exceeding Wall Street expectations. The company posted revenue of $35.08 billion for the quarter ended October 27, a 94% increase year-over-year. This strong financial performance demonstrates Nvidia's ability to capitalize on the growing demand for AI chips.

Moreover, Nvidia's GPUs are widely recognized as the industry standard for AI computing, with major AI hyperscalers, cloud computing platforms, and data centers relying on its products for AI model training and inference. This market leadership position is further solidified by the increasing adoption of AI across various industries.



In addition to Nvidia's fundamentals, several other factors contribute to investor confidence in the company's ability to maintain market leadership in AI chips. Taiwan Semiconductor, Nvidia's chip manufacturer, forecasted that AI-related chips would double their revenue in 2025. This indicates that the demand for AI chips is expected to grow significantly, which bodes well for Nvidia's future prospects.

Analysts also remain bullish on Nvidia's growth prospects, with an average of 60 analysts expecting the company to produce revenue of $196 billion in FY 2026, up 52% from where they think FY 2025 will end. Furthermore, cloud computing platforms have indicated that they plan to invest more in AI infrastructure, which is likely to benefit Nvidia, as its GPUs are the preferred choice for AI computing.



Nvidia's acquisition of Mellanox Technologies in 2020 has also helped the company expand its offerings in the high-performance computing market. This acquisition, along with other AI-related acquisitions, has strengthened Nvidia's position in the AI chip market.

As investors continue to assess the competitive landscape in AI, they may find opportunities in companies like Nvidia that have demonstrated strong fundamentals and market leadership. However, it is essential to remain vigilant and monitor the evolving dynamics of the AI market, as the emergence of new players like DeepSeek could challenge the status quo.

In conclusion, the recent sell-off in tech stocks, particularly Nvidia, reflects investors' concerns about the competitive landscape in AI. However, the company's strong fundamentals and market leadership in AI chips have contributed to a rebound in its stock price. As investors continue to evaluate the long-term growth prospects of AI-related companies, they may find opportunities in the tech sector, despite the recent volatility.