Why Nvidia stock is falling today

Shares of Nvidia (NVDA) fell on Monday after the release of a sophisticated artificial intelligence model by a Chinese startup led to a reckoning on Wall Street regarding AI spending.

Chinese company DeepSeek last week released the R1, an artificial intelligence model that looks to compete with models from US tech giants such as OpenAI and Google despite running on fewer, less powerful chips. U.S. investors began to notice the pattern late last week, and over the weekend began to worry about what it means for highly valued U.S. technology stocks.

Nvidia’s earnings and share price have surged in the past two years as tech giants like Microsoft ( MSFT ), Alphabet ( GOOG )( GOOGL ) and Amazon ( AMZN ) have spent heavily on their AI systems. DeepSeek has investors questioning whether all that spending was necessary and, if not, why it would continue.

Nvidia stock was hammered by Monday’s sell-off. Shares tumbled more than 13% in recent trade, its biggest intraday drop since a tech crash in August. At its deepest, Monday’s selloff wiped nearly $480 billion from Nvidia’s market value.

What analysts said

Wall Street analysts were mostly skeptical of DeepSeek and the selloff it led to, though their comments often reflected uncertainty about the effects DeepSeek could have on the market.

Citi analysts expressed doubt that DeepSeek had achieved its results without the most advanced chips. They maintained their “buy” rating on Nvidia shares and said they don’t expect major US AI companies to move away from using its high-end GPUs.

However, Jefferies analysts noted that DeepSeek’s success could push Silicon Valley management to “refocus on efficiency and ROI, meaning lower demand for computing power from 2026.”

Worries about future AI models requiring less computing power weighed on other high-flying AI stocks, including nuclear power providers Vistra ( VST ) and Constellation Energy Corp . (CEG), a decrease of 20% and 18% respectively. Nvidia rival Broadcom ( AVGO ) fell more than 12%.