Zinger Key Points
- Nvidia stock had the biggest one-day value drop in US stock market history, losing around $600 billion on Monday.
- A look at how Monday's plunge impacted Nvidia CEO Jensen Huang's wealth.
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Semiconductor company NVIDIA Corporation NVDA suffered the biggest single day value wipeout for a U.S. company Monday. The company dropped around $600 billion.
Here's a look at how the stock's move impacted CEO Jensen Huang's wealth.
What Happened: Nvidia CEO Jensen Huang revealed in October that he doesn't check the stock price of the company he founded every day. That may have been a good thing on Monday.
Nvidia shares fell 17% to $118.42 on Monday on concerns that the Chinese AI DeepSeek could disrupt the sector. DeepSeek is said to be cheaper and not use the same expensive items that other American-based AI companies use, which could be bad news for companies like Nvidia.
With the stock price dive, Nvidia dropped from first to third place on the world's most valuable companies list with a market capitalization of $2.900 trillion. The company trails Apple ($3.456 trillion) and Microsoft ($3.230 trillion) as of Monday.
Huang lost $20.1 billion in wealth Monday with his new total hitting $101 billion, as reported by Bloomberg. Huang now ranks 15th among the richest people in the world on the Bloomberg Billionaires Index and has lost $13.1 billion year-to-date.
The billionaire lost around 20% of his wealth, which is among the largest one-day percentage drops for the richest people in the world.
Other billionaires who have companies and wealth tied to the American AI sector also suffered big drops. Oracle Corporation ORCL co-founder Larry Ellison lost $22.6 billion. While this was a bigger dollar value drop, it represented around 12% of Ellison's wealth. Ellison ranks fifth on the billionaires list with a wealth of $186 billion.
Dell Technologies DELL CEO Michael Dell lost $13 billion and now ranks 14th at $114 billion.
Huang now has a larger gap between himself and making the top ten richest people in the world list. Warren Buffett currently ranks 105th at $149 billion. Huang ended 2024 worth $114 billion ranking 12th on the list with a $70.3 billion gain in 2024. At that time, Huang was only $28 billion away from 10th place.
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Why It's Important: Nvidia stock remains up over 80% in the last year and was one of the top performing S&P 500 stocks in 2024. Monday's drop could be short-lived and a minor setback or could signal more pressure on the valuation of companies in the artificial intelligence sector.
Fundstrat Global Advisors' head of research Tom Lee saw Monday's selloff of companies like Nvidia as a buying opportunity.
"To me, it's an overreaction," Lee said on CNBC's "Opening Bell."
Lee compared Monday's drop to a March 2020 Nvidia stock decline that ended up being a good entry point for investors.
"I'd be looking at this as an opportunity."
Nvidia shared some comments Monday on DeepSeek and its open-source AI model.
"DeepSeek's work illustrates how new models can be created using test time scaling, leveraging widely-available models and compute that is fully export control compliant," an Nvidia spokesperson told CNBC.
Nvidia said DeepSeek used GPU versions that are approved for China, shutting down rumors that GPUs from companies like Nvidia that are not allowed to be exported to the country were used.
NVDA Price Action: Nvidia stock is up 1.4% to $120.11 on Tuesday versus a 52-week trading range of $60.70 to $153.13.
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