Nvidia Faces Largest Market Capitalization Loss in U.S. History

On Monday, January 27, 2025, Nvidia experienced a market capitalization loss of nearly USD 600 billion (approximately IDR 9,733 trillion). This decline was recorded as the largest in the history of the U.S. stock market. Nvidia's market value has now fallen to more than twice the capitalization of major companies like Coca-Cola, Chevron, and even surpassing the market values of Oracle and Netflix.

According to a report from CNBC International on Tuesday, January 28, 2025, Nvidia's stock dropped sharply by 17%, closing at USD 118.58. This marked the worst decline for Nvidia since March 16, 2020, which coincided with the start of the COVID-19 pandemic.

After Nvidia's market capitalization briefly surpassed Apple, the company's stock price decline also impacted the Nasdaq index, which fell by 3.1%. This decline was driven by concerns over increasing competition in the artificial intelligence (AI) sector, particularly related to DeepSeek, a rapidly growing AI lab from China.

At the end of December 2024, DeepSeek launched a free, open-source large language model developed in just two months at a cost of less than USD 6 million (approximately IDR 9.7 trillion). They utilized Nvidia H800 chips, which have lower capacity, further fueling concerns within Nvidia about competition in the global AI market.

Nvidia's Market Dominance in the U.S.

Nvidia's graphics processing unit (GPU) has dominated the AI data center chip market in the U.S., with major companies like Alphabet, Meta, and Amazon investing billions of dollars to purchase processors to train and run their AI models.

Analysts at Cantor have assessed that DeepSeek's latest technology launch has sparked significant concerns about its potential impact on demand for computing. This could lead to a surge in spending on GPUs. "Advancements in AI are likely to increase demand for computing, rather than decrease the need for it," said analysts at Cantor.

Although Nvidia's stock has posted significant gains, with a 239% increase in 2023 and 171% in 2024, the market remains concerned about the potential for a decrease in future spending.