Nvidia short bets rake in over $6 billion in profits after DeepSeek panic

Nvidia saw $593 billion wiped off its market value on Monday, in the biggest single-session loss ever for any company

Short sellers of artificial intelligence-related stocks raked in bumper profits after the smashing debut of low-cost AI models from China's DeepSeek spooked Wall Street, with bets against Nvidia yielding record profits totaling more than $6 billion.

Traders betting against AI-darling Nvidia earned profits of about $6.6 billion - the biggest single-day move ever on the stock - according to data analytics firm Ortex.

Nvidia saw $593 billion wiped off its market value on Monday, in the biggest single-session loss ever for any company, after Chinese startup DeepSeek launched AI models that it said are at par or better than industry-leading models in the United States, at a fraction of the cost.

Short sellers of chipmaker Broadcom also earned more than $2 billion in profits.

Other AI-related stocks, such as server-maker Super Micro, data-center operator Equinix and energy provider Vistra, also witnessed heavy losses on Monday, giving investors betting against these firms combined profits of more than $900 million, according to Ortex.

Meanwhile, technology stocks regained some ground on Tuesday with chipmaker Nvidia up about 2.5% in early trading, a day after it suffered the biggest one-day market capitalization loss in history, and traders moved back out of safe-haven currencies into the dollar.

On Wall Street, the mood was calmer than it was on Monday, with the S&P 500 up about 0.5% and the Dow Jones Industrial Average about 0.4% higher. The tech-heavy Nasdaq added more than 1%.

Nasdaq shares tumbled on Monday as chip giant Nvidia dived 17%, losing nearly $593 billion of its value in the biggest one-day market capitalization loss in history. Behind the rout was the emergence of a low-cost Chinese artificial intelligence model, DeepSeek, which made investors question the dominance of AI bellwethers and their suppliers, which has sent shares of tech companies and chip firms soaring.

"We think the selling is overdone," Wells Fargo Investment Institute strategists wrote in a note late on Monday. "DeepSeek appears to have achieved competitiveness through innovative techniques, and we think there is room for U.S. companies to adjust their training processes."

Investors' reassessment of developments in the AI sector will also heighten investor interest in this week's earnings at Microsoft, Tesla and Meta. Executives can expect to be asked whether they still plan to spend so much on computing power.