On Monday, U.S. stock markets dropped as investors feared that DeepSeek, a Chinese AI startup, could hurt the profits of major tech companies.
This worry came at a time when many investors were already concerned that tech stocks were too expensive.
Big Tech stocks like Nvidia and Microsoft fell sharply. Nvidia dropped by 16.97%. The Nasdaq and the S&P 500 also saw losses.
Investors had been excited about AI developments last year, which helped tech stocks rise. But now, the focus has shifted to whether these stocks are overpriced, especially with new competition from DeepSeek.
Barry Bannister from Stifel warned that U.S. stock markets are in one of the “manias” seen over the past century. This means stocks may be overvalued and could fall further.
