Nasdaq Crashes as AI Stocks Collapse Under DeepSeek Shockwave

Wall Street reeled today as the Nasdaq Composite plunged into bear market territory, dragged down by a brutal selloff in artificial intelligence infrastructure stocks. The catalyst? A disruptive AI model from China’s DeepSeek triggered panic selling, erasing billions in market value from industry leaders. Nvidia led the carnage, tumbling 16% in a single session—its worst day since the 2020 market meltdown. Other AI heavyweights followed suit: Broadcom fell 17%, Advanced Micro Devices dropped 10%, and semiconductor supplier ASML Holdings lost 9%. The rout spread across the tech sector, with Microsoft and Alphabet both shedding over 4% as investors reassessed AI spending trajectories. “This isn’t just profit-taking—it’s a fundamental repricing of AI valuations,” said one hedge fund manager. “DeepSeek’s emergence suggests the AI arms race may be accelerating faster than Wall Street anticipated.” The S&P 500 slipped 1.3%, while the Dow Jones managed a modest gain as investors rotated into defensive sectors. Trading volumes spiked to their highest levels in months, underscoring the market’s heightened anxiety. Bloomberg reports that DeepSeek’s new model claims to deliver comparable performance to leading Western AI systems at a fraction of the cost, raising questions about the sustainability of massive AI infrastructure investments.

Dispatch from: Declan Cross

Interim Market Researcher
(Note: Declan Cross is covering this desk while Arthur Sterling is on special assignment.)