Nasdaq Surges 350 Points as Nvidia Stock Rebounds from DeepSeek Crash
Tuesday, Jan 28, 2025 2:54 pm ET
3min read The Nasdaq Composite Index surged by 350 points on Tuesday, driven by a strong rebound in Nvidia (NVDA) stock following Monday's DeepSeek-related sell-off. Nvidia shares climbed 2.5% in premarket trading, clawing back some of the 17% loss suffered on Monday, which was the biggest one-day drop in market capitalization ever for a single stock ($560 billion). The tech-heavy Nasdaq rose 1.1%, or 214.10 points, to 19,555.94, while the broad S&P 500 index was up 0.48%, or 28.98 points, to 6,041.26; and the blue-chip Dow rose 0.39%, or 172.70 points, to 44,886.28.
Nvidia's stock price recovery was fueled by analysts and investors who view the DeepSeek news as a "tech AI head fake" that will be short-lived. Wedbush Securities analyst Daniel Ives called DeepSeek "the Temu of AI," referring to the ultracheap China-based e-commerce firm that quickly recovered from the perceived threat posed by Temu. Ives views the sell-off in AI stocks on Monday as a "golden buying opportunity" for Nvidia stock and other players.
Other AI chip stocks also rebounded from Monday's crash, including Astera Labs (ALAB), Broadcom (AVGO), Marvell Technology (MRVL), and Taiwan Semiconductor Manufacturing (TSM). The strong performance of these stocks contributed to the overall rebound of the Nasdaq and the broader market.
The DeepSeek news, which revealed a cheaper and faster method of artificial intelligence developed by a Chinese company, sparked concerns about the sustainability of the current AI chip market dynamics. However, analysts and investors remain optimistic about the long-term prospects of Nvidia and other AI chip stocks, citing the company's dominant market share, strong demand for AI chips, and the potential for continued growth in the tech sector.
In conclusion, the Nasdaq surged 350 points on Tuesday, driven by a strong rebound in Nvidia stock following Monday's DeepSeek-related sell-off. The tech-heavy index climbed 1.1%, or 214.10 points, to 19,555.94, while the broad S&P 500 index was up 0.48%, or 28.98 points, to 6,041.26; and the blue-chip Dow rose 0.39%, or 172.70 points, to 44,886.28. The rebound in Nvidia stock and other AI chip stocks contributed to the overall market recovery, as investors and analysts remain optimistic about the long-term prospects of the tech sector.
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