Shares of Marvell Technology rose 3.5% after a 19% drop the day before. Shares of another heavyweight chip giant, Broadcom, rose 2.6% in the secondary market after a 17.4% decrease on Monday.
At the May conference, Point72 Asset Management founder Steven Cohen stated that "what emerged from DeepSeek is actually positive because it promotes the development of artificial intelligence." DeepSeek has attracted attention worldwide, although there remains skepticism regarding its valuation claims.
The broad technology sector rebounded with a positive jump of 3.6% in the secondary market after a 5.6% decline the previous day. Monday was marked by a sharp drop that affected many tech stocks around the world and was triggered by the release of a free artificial intelligence from the Chinese company DeepSeek, which claimed that its service requires less data volume compared to existing services.
The decline in Nvidia's stock on Monday did not affect the enthusiasm of traders for options for this company, who quickly began to repurchase contracts on the backdrop of the recovery of stock prices. It is possible that the sell-off will cause investors to be more cautious in assessing the valuation of stocks associated with artificial intelligence.
Speaking about the emergence of cheaper artificial intelligence models, Akri, an analyst in the chip industry, believes that demand for high-performance AI options will remain alongside economically sensitive offerings like DeepSeek. Altman, the head of the company behind ChatGPT, emphasized.
On the European side, shares of the Dutch semiconductor company ASML, trading in the U.S., fell nearly 1% in the secondary market after negative dynamics of 6% on Monday. The sell-off reminds how much investment capital is concentrated in a small number of stocks, which are traded with a significant premium compared to the rest of the market.
Before Nvidia's drastic drop, it was traded almost 60 times more expensive than the entire S&P 500, according to LSEG data. The hype surrounding artificial intelligence led to massive capital influx into stocks, which previously resulted in an increase in the market value of the "Big Semiconductor" companies to around $10 trillion, since the onset of the artificial intelligence boom in November 2022.
However, the drop in Nvidia’s earnings to a minimum for the year, at the level of 26.76, has interested various investors. On Monday, Nvidia lost about 17% or nearly $593 billion in market value — a record drop for any company in one day, while stocks of companies in the semiconductor, energy, and infrastructure sectors related to artificial intelligence lost over $1 trillion.
Secondary companies like Apple and Microsoft played a key role in the growth of tech indices in the secondary market, leading the Nasdaq’s rise. Developers of leading American firms in artificial intelligence have hailed the DeepSeek AI models, but have also questioned whether their multimillion-dollar technologies have been superseded by a cheaper alternative.
"Today investors ask themselves, whether anyone carried out the due diligence and verified whether DeepSeek is really what it claims to be?" remarked JJ Kinn, president of brokerage firm tastytrade in Chicago. Nvidia's stocks closed at $128.99 in the secondary market, still significantly lower than the $142.62 close on Friday.
Meta Platforms, which owns Facebook, added 2.2% to the seat of the growth of stocks despite the volatility on Monday. Several large companies are set to release earnings reports this week, and investors are likely to pose questions about capital investments and competition in the field of artificial intelligence.
Oracle plunged 3.6% after falling around 13.8% on Monday. "Clearly, we offer significantly better or comparable models and, in addition, do not allow ourselves to rest on our laurels with a new competitor!" — citing various sources. The NASDAQ AI index, which also fell, recovered and rose 1.1% in the secondary market after a 9.2% decline in the previous session, the largest percentage drop in one day since March 2020.
