Technology stocks on Wall Street showed a strong recovery on Tuesday, rebounding from the historic losses experienced a day prior when Nvidia’s market value plummeted by a staggering $593 billion. The previous session’s selloff was primarily triggered by concerns surrounding the emergence of DeepSeek, a Chinese AI startup that introduced a low-cost AI assistant, raising fears that it could disrupt the market dominance of U.S. tech giants. After suffering a 17% decline on Monday—the biggest one-day market loss in history—Nvidia made a remarkable comeback, surging 8.9% on Tuesday as investors saw a potential buying opportunity. Other technology stocks, including semiconductor, power, and AI-related infrastructure companies, also rebounded after collectively losing more than $1 trillion in market value the previous day.

Tech Giants Boost Market Sentiment

The tech recovery was largely driven by major companies such as Apple and Microsoft.

• Apple’s stock rose by 3.7%, making it the second-largest contributor to the Nasdaq’s gains after Nvidia.
• Microsoft rebounded by 2.9%, reversing some of its earlier losses.
• Meta Platforms, the parent company of Facebook, added 2.2%, marking its seventh consecutive day of gains, despite the overall market turbulence caused by AI uncertainties.

Overall, the technology sector climbed 3.6% on Tuesday after experiencing a 5.6% decline on Monday. The Philadelphia Semiconductor Index, which tracks key chip manufacturers, gained 1.1% on Tuesday after enduring a 9.2% drop on Monday—the sharpest single-day percentage fall since March 2020. Investors began reassessing whether DeepSeek’s AI model was truly as revolutionary as initially feared. JJ Kinahan, President of Tastytrade, expressed skepticism: “Yesterday was an initial reaction. Today, investors are questioning whether DeepSeek’s claims hold up. Can we verify that they truly developed it at such a lower cost?” This shift in sentiment helped stabilize the market as tech investors reconsidered the long-term impact of new AI competitors.

Nvidia’s Stock Performance Post-Selloff

By Tuesday’s closing, Nvidia shares were priced at $128.99 per share, still lower than their Friday closing price of $142.62, but showing a strong recovery from Monday’s steep drop. Other tech firms also recovered from Monday’s losses:

• Oracle gained 3.6%, after a 13.8% drop the previous day.
• Marvell Technology rose 3.5%, recovering from a 19% loss.
• Broadcom climbed 2.6%, after suffering a 17.4% decline on Monday.

AI Market Volatility Eases as Investors Regain Confidence in Tech Stocks

Despite the dramatic selloff, some investors view DeepSeek’s emergence as an overall positive development for the AI industry. Steven Cohen, Founder of Point72 Asset Management, shared his insights during a conference in Miami: “DeepSeek’s breakthrough is actually bullish because it advances the progress of artificial intelligence.” Meanwhile, traders quickly returned to Nvidia, with options traders betting on a continued market recovery. OpenAI CEO Sam Altman called DeepSeek’s model “impressive” and welcomed new competitors: “We will obviously deliver much better models, but it’s invigorating to have competition!”

Former U.S. President Donald Trump weighed in on the AI disruption: “This is a wake-up call for our industries.” After a historic market downturn, Wall Street’s tech sector rebounded on Tuesday, led by Nvidia, Apple, and Microsoft. While the rise of DeepSeek initially sparked fears of AI disruption, investors reconsidered the long-term impact, leading to renewed confidence in Nvidia and the broader technology sector. Despite ongoing market volatility, experts remain bullish on AI stocks, emphasizing that high-performance hardware remains crucial for AI advancements. As competition in AI technology grows, companies like Nvidia and OpenAI are expected to continue innovating, ensuring they remain at the forefront of the rapidly evolving AI landscape.