- The U.S. stock market showed a rebound centered on tech stocks, with NVIDIA rising 8.82% from the previous day.
- There were concerns about a decline in sales of NVIDIA's expensive AI chips due to DeepSeek's low-cost AI model development, but Wall Street maintained a positive view on NVIDIA.
- Morgan Stanley lowered NVIDIA's target price but maintained an 'overweight' rating, delivering a positive message to investors.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
'DeepSeek Shock' Nasdaq, 3% Plunge the Previous Day → 2% Rebound
NVIDIA Closes at $128.86, Market Cap Recovers to $3 Trillion
The U.S. stock market, shocked by the Chinese AI startup DeepSeek, showed signs of stabilization on the 28th (local time) as tech stocks rebounded.
In the New York stock market, the three major indices showed strength, with the Nasdaq Composite Index, which had plunged 3% the previous day, rebounding by 2%. Tech stocks, which had plummeted due to the shock from China's AI DeepSeek, regained some of the previous day's losses thanks to bargain hunting.
At the close of the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 136.77 points (0.31%) to close at 44,850.35.
The Standard & Poor's (S&P) 500 Index rose 55.43 points (0.92%) to 6,067.71, and the Nasdaq Composite Index jumped 391.75 points (2.03%) to 19,733.59.
NVIDIA closed at $128.86, up 8.82% from the previous day.
The market cap based on the closing price recovered to $3.1558 trillion.
Most of the major tech stocks, the 'Magnificent 7', including Apple (3.65%), Microsoft (2.87%), Amazon (1.16%), Google Alphabet (1.70%), and Meta (2.19%), showed strength.
The tech-heavy Nasdaq index rose 2.03%, and the Philadelphia Semiconductor Index, composed of semiconductor-related stocks, rose 1.09%.
The previous day, the U.S. stock market was hit hard as DeepSeek's AI chatbot app topped the U.S. App Store downloads, causing a stir.
DeepSeek's AI model attracted attention for having performance comparable to AI models from U.S. companies like OpenAI, while being developed at a much lower cost.
NVIDIA, the leading AI chip stock, plunged 16.97% in a single day as investor anxiety over U.S. AI-related companies grew. Its market cap evaporated by $589 billion in a single day, setting a record for the largest single-day market cap loss for a single company in New York Stock Exchange history.
This was due to the cost DeepSeek invested in developing its AI model, which was reportedly only about $5.576 million. This was in stark contrast to the tens of billions to hundreds of billions spent by U.S. companies. This led to the 'uselessness theory' of NVIDIA's expensive AI chips.
Investors feared that if DeepSeek's low-cost AI model development method spread, NVIDIA's massive sales and net profits, which had been driven by expensive, cutting-edge AI chips, could significantly decrease.
However, according to U.S. economic media CNBC, Wall Street generally remained optimistic about the long-term prospects of the AI industry and did not downgrade NVIDIA's investment rating.
Investment bank Morgan Stanley lowered NVIDIA's target price from $166 to $152 while maintaining an 'overweight' rating.
Joseph Moore of Morgan Stanley analyzed, "DeepSeek's AI innovation could lead to additional U.S. export controls or lower (companies') spending enthusiasm," but "maintains a positive outlook."
Raymo Renshaw of Barclays explained, "We need to distinguish the potential benefits and drawbacks that DeepSeek brings to the software industry," and "if generative AI adoption becomes easier at a lower cost, it means AI will spread faster and wider in the software world."
Reporter Yoo Ji-hee, Hankyung.com keephee@hankyung.com

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