Nvidia's $1 Trillion Comeback Shows DeepSeek No Longer Spooks Wall Street

Nvidia Corp. NVDA has staged one of the most impressive rebounds in recent market history, regaining over $1 trillion in market value in just weeks following a steep drop in early 2025.As of Monday’s close, the chipmaker’s market capitalization was $3.3 trillion, compared with an 10-month low of $2.3 trillion reached in early April. The spectacular rebound suggests Wall Street is no longer fretting over factors seen as risks to Nvidia’s business earlier this year ― including the Chinese AI startup DeepSeek, whose low-cost model fueled fears that demand for high-performance chips may have been overestimated.Here's a breakdown of what happened and why the stock surged back.The Drop: The January 2025 announcement by DeepSeek of a cost-effective AI model that matched the performance of Western models at a fraction of the cost contributed to a sharp decline in Nvidia's stock price. DeepSeek raised concerns that Nvidia's dominant position in the AI chip market could be threatened, especially as the model was developed using the U.S. chipmaker’s GPUs but optimized for efficiency which could reduce future demand for company’s high-end chips.Furthermore, successive rounds of U.S. export controls severely limited Nvidia's ability to sell its most advanced AI chips to China. As a result, Nvidia's sales in the world’s No. 2 economy dropped to about half of previous levels, further weighing on revenue and investor sentiment. President Donald Trump's tariff announcements on April 2 added even more pressure on Nvidia's stock. eventually leading to its year-to-date closing low of $94.31 per share and a market cap of approximately $2.3 trillion on April 4. This marked the bottom and the stock began a strong rebound in the weeks that followed. The Resurgence: Nvidia remains the undisputed leader in data center GPUs, holding roughly a 90% market share, and the stock began to rebound once the Big Tech first-quarter earnings reports started rolling in. Companies like Amazon and Microsoft reaffirmed their commitment to large artificial-intelligence infrastructure investments and fears of an AI spending slowdown eased. Investor sentiment improved further after the U.S. and China agreed to a 90-day pause on the steepest tariffs and trade war concerns began to ease. Last week marked another catalyst for the stock after Nvidia announced that it had partnered with several leading Saudi Arabian organizations, including Humain, to collaborate on AI initiatives. Humain, a subsidiary of Saudi Arabia’s Public Investment Fund dedicated to artificial intelligence, plans to construct AI factories across the Middle East nation powered by several hundred thousand of Nvidia’s most advanced GPUs. Bank of America Securities analyst Vivek Arya estimated the size of the Humain deals to be between $2 billion to $3 billion annually, likely starting in 2025, with a total of between $15 billion and $20 billion over a multi-year period. NVDA Price Action: Nvidia's stock has climbed more than 30% over the past month and closed at $135.57 with a market cap of $3.31 trillion on Monday, marking a $1 trillion resurgence from its early-April lows. Nvidia shares were down 1.53% at $133.50 at the time of publication Tuesday, according to data from Benzinga Pro. Read Also: Trump’s ‘Big Beautiful Bill’ Advances: Here’s Who Wins And Loses Image: Shutterstock