Chuck Zodda, managing partner and Chief Investment Officer from the Armstrong Advisory Group discusses the dip of tech stocks, especially Nvidia after the announcement of Chinese AI start-up DeepSeek.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

The news is the latest sign of skyrocketing valuations for privately held AI start-ups, which show growing investor enthusiasm for AI and confidence that companies like Anthropic will justify that valuation over the long term, eventually generating billions in profits.

Nvidia stock surged as the AI chipmaker began to recover from a massive decline the prior day that shaved nearly $600 billion off its market cap.

Other technology stocks trading at relatively low valuations to historical levels include Micron, Super Micro and Workday.

Shares of Nvidia ( NVDA -5.29%) were sinking Wednesday. The company's stock fell 6.2% as of 2:20 p.m. ET, but lost as much as 6.9% earlier in the day. The move comes as the S&P 500 ( ^GSPC -0.39%) and Nasdaq Composite ( ^IXIC -0.

US stocks and shares in chip-making giant Nvidia on Tuesday clawed back some of their losses following a steep sell-off a day earlier triggered by the sudden success of Chinese

the chip maker saw its market value drop by $593 billion, the biggest one-day drop for any listed company on record.