Nasdaq falls 3% whilst Meta and Apple defy tech stock slump as Nvidia losses nears $600 billion

Following Chinese artificial intelligence (AI) start-up DeepSeek unveiling its R1 AI model, which reportedly rivals the performance of Nvidia-supported systems but operates at a fraction of the price, the tech market has been shaken to its core, leading to a mass selloff in global tech stocks.

For instance, the tech-heavy Nasdaq index dropped 3%, while Nvidia lost nearly $600 billion in market capitalisation yesterday – by far the single biggest one-day loss in market value experienced by any company in history.

While the majority of tech stocks plunged in value, this was not the case for all of the major technology players.

Ahead of their earnings calls this week, Apple and Meta saw a rise of more than two and three percent, respectively.

The response of these two members of the Magnificent Seven shows that DeepSeek’s breakthrough will not necessarily have a negative impact on tech stocks, both in the short-term and long-term.

Kate Leaman, chief market analyst at AvaTrade, said, “Meta’s scale, data advantage, and integration of AI into products like advertising and the metaverse ensured that, unlike its tech competitors, it was able to withstand the global selloff in tech stocks. In fact, in the case of Meta, advancements like DeepSeek’s AI breakthroughs could even help its own AI model, Llama, become more efficient.

“Meta’s push to expand its AI infrastructure – the company is planning to invest $65 billion in this area in 2025 – is already enhancing its ad-targeting capabilities and strengthening its overall product ecosystem, setting the stage for continued growth.

“Meanwhile, Apple’s stock surge saw it regain its title as the world’s most valuable company. Innovations like DeepSeek’s smaller, more efficient AI models could potentially improve the AI capabilities of Apple’s flagship products, like the iPhone. Apple has already shown its commitment to AI by integrating ChatGPT into its latest devices, demonstrating its dedication to staying competitive. Interestingly, Apple’s relatively low AI expenditures compared to other tech giants may have made it more resilient during recent AI-related selloffs.

“While the success of DeepSeek’s cost-effective AI model doesn’t necessarily translate to cheaper AI for Meta or Apple, it highlights opportunities for greater efficiency. For Meta, this could mean faster and more efficient development of large language models. For Apple, it suggests the ability to integrate powerful AI features into its products without a significant increase in costs.”