Rather than a disaster, the drop in Nvidia stock caused by DeepSeek looks like a terrific opportunity for long-term investors. As shown below, the forward price-to-earnings (P/E) ratio dropped sharply along with the stock price.

U.S. tech stocks tumbled after Chinese startup DeepSeek unveiled a low-cost AI chatbot, sparking concerns about the sky-high valuations of tech giants like Nvidia and Microsoft. Patrick Moorhead, chief analyst at Moor Insights,

According to a paper authored by the lab, the DeepSeek-R1 model outperforms cutting-edge models such as OpenAI’s o1 and Meta’s Llama AI models across multiple benchmarks.