Fundstrat Global Advisors‘ head of research Tom Lee believes Monday’s massive tech sector sell-off, which saw Nvidia Corp. NVDA shares plunge 17%, represents a buying opportunity rather than a fundamental shift in the artificial intelligence landscape.
What Happened: “To me, it’s an overreaction,” Lee told CNBC’s “Closing Bell,” comparing the drop to Nvidia’s March 2020 decline that proved to be a significant entry point for investors.
“I’d be looking at this as an opportunity,” Lee said.
Lee dismissed concerns that Nvidia could become “Betamax” – referencing the obsolete video format that lost to VHS – noting that such a scenario would be the only justification for Monday’s severe selling pressure.
The sell-off was triggered by Chinese AI startup DeepSeek‘s announcement of a free, open-source large language model developed for under $6 million using Nvidia’s H800 chips.
Why It Matters: The cost-efficient breakthrough sparked fears about the sustainability of massive AI infrastructure investments, leading to Nvidia’s largest single-day market value loss of approximately $600 billion.
The market reaction came despite Nvidia’s statement that DeepSeek’s development used export-control-compliant technology. “DeepSeek’s inference requires significant numbers of Nvidia GPUs and high-performance networking,” the company said.
Major tech companies continue to demonstrate confidence in AI investments, with Microsoft Corp. MSFT planning $80 billion in AI infrastructure spending for 2025 and Meta Platforms Inc. META projecting $60-65 billion.
Price Action: Nvidia’s stock closed at $118.58 on Monday, down 16.86% for the day. In after-hours trading, the stock edged up 1.35%. Over the past year, Nvidia’s stock surged 89.81%, according to data from Benzinga Pro.
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