Nvidia faces biggest market cap loss for a US company ever

Nvidia shares dropped in the biggest market cap loss ever recorded for an American company in a single day.

The company’s shares dropped by 17% to reach close to $118.58 on Monday, January 27, equating to a market cap loss of nearly $600 billion. Nvidia is not alone in its struggles, either, with data center companies that rely on the company’s chips also plunging, including Dell, Oracle and Super Micro Computer all facing drops of at least 8.7%.

Those sell-offs are a sign of a wider shift in the US tech sector, thanks to concerns around the rise of free ChatGPT competitor from China, DeepSeek. This comes on the heels of Nvidia soaring past Apple to become the most valuable publicly traded company last week, only for Monday to become the company’s worst day on the market since the Covid pandemic.

The Chinese AI lab claims that its free large language model took just two months and less than $6 million to build, compared to the long months and over $500 million it took to create OpenAI’s ChatGPT, for example. DeepSeek uses reduced-capability chips from Nvidia called H800s.

Other companies that use Nvidia chips include Google, Meta, Amazon, and more. Those tech giants have spent billions on their AI models but the rapid growth of DeepSeek has seemingly led to fears that spending on chips has hit its peak. This sparked a mass sell-off at Nvidia and the historic drop that we’re seeing now.

Fellow AI chip producers were also impacted, with Broadcom – a company that experienced similarly huge successes as Nvidia as a result of the AI boom – falling 17% on Monday to reach a market cap loss of $200 billion. Companies associated with Nvidia’s GPUs for hardware also saw losses, including Dell, Hewlett Packard Enterprise, and Super Micro Computer. President Donald Trump’s Oracle fell 14%.

The record impact on companies is a sign that the AI sector is far from secure. While Nvidia might have carved out a top spot over the last few years, but competitors like DeepSeek can still come in to disrupt the norm. As it stands, Nvidia is now the third most valuable public company, behind Apple and Microsoft.

Featured image: Midjourney

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