Panic of the market on Deepseek? Why the decrease of $ 500 billion in Nvidia is a pure hysteria.

Yesterday, a news from Breaking News sent technological stocks in a flesh. The Chinese start-up Deepseek has developed an AI chatbot which would have competed the models of industry leaders like Openai, Anthropic and Alphabet to a fraction of the cost. The allegations of the start-up to achieve competitive performance by using less powerful fleas for only $ 6 million have aroused generalized anxiety of the American technological expenditure.

Market reaction has proven to be particularly severe to Nvidia (Nasdaq: NVDA)With actions that drop and scramble a half-bill of market capitalization at the time of writing this article. To put this amazing figure in perspective, this amount is equivalent to around twice and a half times the market capitalization of Pfizer. This sale reflects the pairs of the market passed on Chinese technological breakthroughs which ultimately proved to be premature.

Where to invest $ 1,000 now? Our team of analysts has just revealed what they believe 10 Best Actions To buy now. See the 10 actions “

Image source: Getty Images.

With this hysteria to the mind, let’s dive into the factors that make this semiconductive power plant a summit “Buy-the-Dip“Play now.

Test Deepseek

Like many others, I immediately tried to put Deepsek to the test when hear the news. After several unsuccessful attempts due to servers, I finally had access to test the capacities of the platform.

I organized a series of standard prompts to assess precision and precision, followed by complex tasks such as data compilation – an area where the geminis of alphabet generally. My results have shown that Deepseek struggling with basic information recovery and statistical reproduction.

When asked to analyze digital data, the model has produced inconsistent results and has often failed to maintain precision on several attempts at the same task. In simple terms, the performance gap of the real world between Deepseek and the main models of American AI is not even close, according to my experience.

The false idea of ​​the market AI

Wall Street’s anxiety in the face of Deepseek’s profitable approach is missing the situation as a whole. Although the company claims to develop AI models using less expensive chips, this neglects massive infrastructure and investments in research required for the development of advanced AI.

The development cost of Deepseek $ 6 million using NVIDIA H800 chips may seem impressive at first glance, but it represents only a fraction of the billions invested in research and fundamental IA infrastructure.

In addition, the performance gap between Deepseek and the main platforms of American AI is likely to develop further while Nvidia deploys its advanced Blackwell architecture and that American data centers are continuing their aggressive expansion.

Another key problem to keep in mind is that the development of cutting -edge AI requires not only powerful fleas, but also a sophisticated software optimization, advanced cooling systems and specialized data centers – of specialized data centers – features that require billions of capital expenses to implement and maintain.

This current expansion recently received a major boost when American technology and government leaders have announced a historic investment of $ 500 billion in AI infrastructure called Stargate. This unprecedented national commitment demonstrates both the strategic importance of the advanced AI and the sustained demand for high performance chips.

Although companies like Deepseek can succeed in certain market segments, they are faced with a difficult battle against this massive capital advantage. In other words, the assertions that the demand for premium chips from Nvidia will simply be aligned with the realities of the market and the trajectory of AI development.

A strategic purchase opportunity

The excessive reaction of yesterday’s market has created a convincing entry point for Nvidia investors. Before the sale, the actions of the technological company were negotiated the expected profits at 47 times. NVIDIA’s premium assessment reflects the current expansion of a dollars billion in the infrastructure of the American AI, coupled with the intense calculation requirements of the realization Artificial general intelligence (AG). This fundamental story has not changed with the advent of Deepseek.

Market analysts highlight several factors supporting the sustained growth in advanced demand for fleas, in particular the exponential increase in the complexity of the AI ​​model, the emergence of new AI applications in all industries and growing accent On AI sovereignty among major economies. The development of new generation AI systems not only requires progressive improvements in calculation power, but quantum jumps in treatment capacities that only cutting -edge fleas can provide.

Given these underlying growth engines and the dominant market position of Nvidia, the current decline represents an interesting opportunity to acquire actions at reduced prices. The basic commercial thesis of the company remains intact, which means that the recent low price seems to be disconnected from long -term fundamentals.

Do not miss this second chance for a potentially lucrative opportunity

Have you ever had the impression of having missed the boat to buy the most successful actions? So you will want to hear this.

On rare occasions, our team of analysts experts issues a The “Double Down” stock Recommendation for the companies they think are about to burst. If you are afraid, you have already missed your chance to invest, it’s the best time to buy before it is too late. And the figures speak for themselves:

• NVIDIA: If you have invested $ 1,000 when we doubled in 2009, You would have $ 369,816! *

• Apple: If you have invested $ 1,000 when we doubled in 2008, You would have $ 42,191! *

• Netflix: If you have invested $ 1,000 when we doubled in 2004, You would have $ 527,206! *

Currently, we are making “double” alerts for three incredible companies, and there may be no luck like this one soon.

Learn more “

* Return shares advisor to January 27, 2025

Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. George Budwell has positions in Nvidia and Pfizer. The Motley Fool has positions and recommends Alphabet, Nvidia and Pfizer. The Word’s madman has a Disclosure policy.