DeepSeek Sparks AI Carnage As Magnificent Seven, Broadcom Lose Nearly $900 Billion In Value: Why This Expert Is Still 'Bullish' On US Tech

A seismic shift is rattling Wall Street on Monday as China's DeepSeek R1 forces investors to rethink artificial intelligence dominance, sending U.S. tech stocks into a free fall.

The Magnificent Seven and Broadcom Inc. AVGO have seen nearly $900 billion in market value erased within the first 30 minutes of trading in New York, as concerns grow over lower-cost Chinese AI models threatening America's top tech giants.

Tech Bloodbath: Nvidia Leads Selloff

The Roundhill Magnificent Seven ETF MAGS dropped 3.9%, reflecting deep losses across the AI-driven mega-cap space.

Among the worst hit, Nvidia Corp. NVDA collapsed over 10%, erasing $475.81 billion.

Microsoft Corp. MSFT followed with a 3.4% drop, wiping out $130.13 billion, while Broadcom slumped 11.8%, losing $116 billion in value.

Company	Market Cap Loss (USD bn)	% change
Nvidia Corp.	-475.44	-10.83%
Microsoft Corp.	-130.28	-3.37%
Broadcom Inc.	-116.75	-11.8%
Amazon.com Inc. AMZN	-74.63	-2.79%
Alphabet Inc. GOOG	-49.71	-3.15%
Tesla Inc. TSLA	-30.92	-0.98%
Meta Platforms Inc. META	-4.99	-2.00%
Apple Inc. AAPL	+53.86	+2.01%
Total Market Cap Loss	– 829.72

Updated at 9:00 a.m. ET

DeepSeek Sparks AI Valuation Fears

The selloff was triggered by concerns that China's DeepSeek R1, an open-source AI model reportedly rivaling top U.S. models at a fraction of the cost, could erode pricing power and future growth prospects for U.S. AI firms.

“The Stargate project was launched in part to assert the United States' global AI dominance and prevent China from taking the lead. If China already has the lead and is able to develop comparable AI products with cheaper, less dynamic chips and other inputs, it could result in a radical change in market perceptions,” analyst Michael Gayed said.

Goldman Sachs analyst Ronald Keung highlighted that cost-efficient Chinese AI firms could rapidly expand their global influence, challenging the massive capital expenditures made by U.S. tech giants.

Yet, not all analysts see this as a long-term negative.

CJ Muse, a semiconductor analyst at Cantor Fitzgerald, highlighted that DeepSeek's emergence could actually be bullish for Nvidia and the broader AI industry.

“DeepSeek R1 is actually very bullish for Nvidia,” Muse said on Bloomberg TV. “Their announcement means we are closer to AGI (artificial generative intelligence). That's bullish for the ubiquity of AI.”

Despite the stock plunge, Muse indicates that AI leaders will not cut capital expenditures anytime soon.

“They are not going to slow down spending. They want to win,” he said.

Ahead of this week’s key tech earnings, Muse doesn’t expect any material change in CapEx announcements from Meta, Microsoft, or Nvidia.

"The market has to digest the news and realize this is not a negative event," the analyst said.

“China understands how important AI is for their economy,” Muse stated, indicating that the tech battle vis-à-vis the U.S. is going to be fierce.

“I wouldn't never bet against the engineer we have in the U.S.” he ended.

Major Tech Earnings Reports Loom As AI Investors Seek Clarity

Four Magnificent Seven companies are reporting earnings this week, with investors closely watching whether AI spending remains robust despite growing competition.

Below are Street’s earnings-per-share and revenue estimates according to Benzinga Pro platform:

Company	Earnings Date	EPS Estimate	Revenue Estimate (USD bn)
Apple	Jan. 30 (after close)	2.35	124.19
Microsoft	Jan. 29 (before open)	3.12	68.80
Meta Platforms	Jan. 29 (before open)	6.77	46.99
Tesla	Jan. 29 (after close)	0.74	27.13