After a market-wide panic over Chinese artificial intelligence start-up DeepSeek, CNBC’s Jim Cramer reflected on what the new player’s entrance into the arena will mean for Nvidia and its tech peers. The full picture is not yet clear, and Nvidia might have sold off too hard, he said, stressing that investors would have been wise not to make any sudden moves.
“When things are complicated or murky, it might not make sense to help create the biggest single day dollar loss in history,” he said. “There’s a better way. Just don’t do anything—if you really want to sell, you can do it into the rebound the next day.”
Stocks recovered Tuesday after Monday’s decline when market-leader Nvidia shed nearly $600 billion, the largest one-day loss in U.S. history. Investors worried that DeepSeek’s new AI model, which is supposedly highly advanced and cheaper to run than its popular peers like OpenAI, would hurt Nvidia’s profits because Big Tech wouldn’t need to buy as many of its chips. Despite the gigantic loss, Nvidia stock managed to rally during Tuesday’s session, up nearly 9% by close.
Cramer acknowledged that it’s possible companies may not need to place more orders if they can get more use out of Nvidia’s products or if a new advanced AI model can run on less powerful chips. But he suggested it’s not that simple, saying there are likely some innovations that DeepSeek alone won’t be able to accomplish, like creating specialized humanoid robots or self-driving cars. He also questioned whether data would be secure with DeepSeek.
Cramer also wondered whether news about DeepSeek blindsided tech big wigs the same way it shocked the market. He said it’s possible that big Nvidia buyers like Meta‘s Mark Zuckerberg, Oracle‘s Larry Ellison and Tesla‘s Elon Musk were not as surprised.
“Do you really think they didn’t know anything about this? Were they as clueless as the people who sold Nvidia into yesterday’s vortex?” Cramer asked. “Somehow, I don’t think that makes a lot of sense.”
Nvidia declined to comment. DeepSeek did not immediately respond to request for comment.
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia.
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