Nvidia Share Price Drop ? Is DeepSeek Killing the AI Giant?

Nvidia (NVDA), the world’s most powerful chip company and the favorite stock of many Indian investors, is facing a tough time. After a massive rally that made it one of the most valuable companies on the planet, Nvidia’s share price has seen a sharp drop in early February 2026.

The stock is currently trading around $174 (approx. ₹15,000), down about 6-7% in the last month. For investors in India who hold US stocks, this sudden volatility has sparked worry. Is the AI boom slowing down, or is this just a temporary dip before the next big jump?

Here is a simple breakdown of why Nvidia is falling, the “China factor” causing panic, and what experts are saying.

What Happened to Nvidia Stock?

In the first week of February 2026, Nvidia shares faced heavy selling pressure. The stock, which had been steadily climbing, suddenly lost momentum.

• Current Price: ~$174 USD (Fluctuating)
• Recent Drop: Down nearly 10% from its recent highs.
• Market Mood: Fear and uncertainty have returned to the tech sector.

While a 10% drop might look normal for smaller companies, for a giant like Nvidia, it wipes out billions of dollars in market value. This has dragged down other tech stocks and semiconductor companies globally.

Why is Nvidia Falling? (The DeepSeek Factor)

The main reason for this sudden crash is a new player from China called DeepSeek.

1. The DeepSeek Shock

In late January 2026, a Chinese startup named DeepSeek released a new AI model (DeepSeek-R1). This news shocked the world for two reasons:

• It is Cheap: DeepSeek claimed they built this powerful AI model for just $6 million. In comparison, US companies like OpenAI and Google spend hundreds of millions (or billions) on Nvidia’s expensive chips to train their models.
• It Works well: The performance of this cheap model was surprisingly close to the top-tier American models.

Why does this hurt Nvidia? Investors are worried that if companies can build powerful AI cheaply without buying thousands of Nvidia’s expensive H100 or Blackwell chips, Nvidia’s profits could shrink. This fear—that AI hardware is becoming “commoditized” (cheaper and common)—led to panic selling.

2. Profit Booking

Nvidia stock has risen by over 1000% in the last few years. Many big investors and hedge funds are simply “taking profits” (selling high) to be safe, especially with the uncertainty around the Chinese competition.

Expert Analysis: Is the Party Over?

Despite the panic, most top market experts believe the fear is exaggerated. Here is why the “DeepSeek threat” might not be as bad as it looks:

• Nvidia’s “Moat” is Strong: Nvidia doesn’t just sell chips; it sells an entire ecosystem (software + hardware) called CUDA. Most developers globally are locked into this system, and switching away is very difficult.
• Demand is Still Huge: Reports indicate that data centers are still “sold out” of power and space. Big tech giants (Microsoft, Meta, Google) are still buying every Nvidia chip they can get to stay ahead.
• The “Jevons Paradox”: Some economists argue that if AI becomes cheaper (thanks to models like DeepSeek), more companies will use it. This could actually increase the total demand for chips in the long run, not reduce it.

Analyst Forecasts: Most Wall Street analysts have kept their “BUY” rating on Nvidia.

• Average Price Target: ~$255 USD (Potential 46% upside).
• Bullish Target: Some experts predict it could hit $352 by the end of 2026.

What This Means for Indian Investors

For Indians investing in US stocks via apps like INDmoney, Vested, or Stockal, this volatility can be scary.

• For Long-Term Investors: If you believe AI is the future (self-driving cars, robotics, medicine), this dip could be a “discount” opportunity. The fundamentals of the company have not changed overnight.
• For Short-Term Traders: The market is very shaky right now. It might be risky to enter until the price stabilizes.
• Currency Factor: Since the US Dollar is strong against the Rupee (trading near ₹87), buying US stocks is slightly more expensive for Indians right now.

What Happens Next? (Crucial Date)

All eyes are now on February 25, 2026. This is when Nvidia will release its Fiscal Q4 Earnings Report.

Read More : Tech Progress vs Control

• If earnings are good: Nvidia proves the “DeepSeek fear” was wrong, and the stock could rocket back up.
• If earnings miss targets: The stock could fall further towards the $140–$160 range.

Note: Official updates from CEO Jensen Huang regarding the Blackwell chip production will also be critical during this event.

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