Nvidia shares are rebounding after a recent slump, driven by initial concerns over DeepSeek's cost-effective AI model potentially impacting demand for Nvidia's products. DeepSeek, a Chinese AI company, introduced a new AI model that competes with established players like OpenAI's ChatGPT at a lower cost, initially causing a 17% drop in Nvidia's stock. However, analysts are now suggesting that these fears may be exaggerated, as skepticism remains about DeepSeek's ability to significantly disrupt Nvidia's market position, particularly in the U.S. market. Nvidia's continued dominance in AI and autonomous applications, along with the open-source nature of DeepSeek's model, could ultimately benefit the broader AI ecosystem.
The Direxion Daily NVDA Bear 1X Shares (NVDD) experienced a decline, dropping 4.97% to $6.69 at 6:00 AM on Tuesday, January 28.