After the massive Wall Street sell-off that took place Monday, all eyes are on how the stock market would respond. Specifically, tech stocks with a focus on the AI sector have become the focal point as the arrival of DeepSeek AI drove panic. Early Wednesday, Nvidia (NVDA) had increased 8% as tech stocks kept bouncing back.
Although the jump was short-lived, it inspired some hope in the affected technology companies. Moreover, it was certainly not alone. Chip stocks in both the United States and Europe found their footing Tuesday, with the rest of the week looking to be crucial in the impending recovery.
Also Read: Nvidia Planning Epic Comeback? Experts Say Stock Could Soar
Nvidia & Other Tech Stocks Bounce Back for 2nd Straight Day: Has DeepSeek Panic Subsided?
The last several years have seen Wall Street invest heavily in the development of artificial intelligence. Since the arrival of OpenAI’s ChatGPT, the opportunities have been immense. With companies like Microsoft (MSFT) investing $13 billion into the developer, demand has been sky-high.
Yet that surging demand took a stark turn early this week. The arrival of Chinese startup DeepSeek placed those efforts in question. One of the hardest hit was Nvidia, which lost $600 billion in market value and plummeted more than 12%. However, it looks like a turnaround may be taking place.
Also Read: Nvidia (NVDA) Falls 12% as DeepSeek Has Wall Street Panicking
Nvidia (NVDA) rebounded 8% Tuesday, with tech stocks following suit as they are all seeking to bounce back from plummeting values. Although the AI chipmaker is down 3% Wednesday, the slight climb is looking like it’s taking place. There is no understating of the impact that the DeepSeek fall had on Nvidia. Its $124 price is far below the $142 value its shares had on Friday’s close.
Still, there are signs this is reversing. European tech stocks had jumped alongside Nvidia. Specifically, ASML jumped almost 8% as the Dutch semiconductor reported a rise in new bookings, Reuters reported. Additionally, a European tech stock index (SX8P) jumped 3.2%, which is a good sign.
There are reasons to believe that Nvidia’s fall was temporary. Its infrastructure and business integration are solidified. Therefore, the success of DeepSeek’s new language model should have a limited impact on its earning potential. Still, that hasn’t stopped Wall Street from being concerned enough to make a notable step back.