Shares of chipmaker Nvidia (NVDA) plummeted 17% on Monday and lost nearly $600 billion in market value. The decline was triggered by the growing popularity of a cost-effective artificial intelligence model from Chinese startup DeepSeek. However, retail investors quickly swooped in to buy the dip as they purchased over $920 million worth of Nvidia shares across Monday and Tuesday, according to data from VandaTrack.
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In addition to the optimism from retail investors, Wall Street strategists also remain bullish on Nvidia’s long-term prospects. Indeed, Fundstrat’s Tom Lee believes the recent decline presents a “buy-the-dip” opportunity, while Bank of America’s Vivek Arya sees the recent drawdown as an “enhanced buying opportunity.” In addition, Bernstein’s Stacy Rasgon told Yahoo Finance that the DeepSeek-driven sell-off was “overblown” and doesn’t spell “doomsday for AI infrastructure.” It is also worth noting that both Arya and Rasgon are five-star analysts.
The reason why DeepSeek’s AI model caused panic among investors was due to its potential to disrupt Nvidia’s dominance in the AI chip market. DeepSeek’s model uses cheaper chips and less data, which could challenge Nvidia’s pricing power and market share. However, analysts remain confident in Nvidia’s ability to adapt and maintain its leadership position in the AI chip market.
Is NVDA a Good Stock to Buy?
Turning to Wall Street, analysts remain bullish on NVDA stock, with a Strong Buy consensus rating based on 37 Buys and three Holds assigned in the past three months. After a 94% rally in its share price over the past year, the average NVDA price target of $178.32 per share implies an upside potential of 46.1% from current levels.
