Nvidia (NASDAQ:NVDA) shares surged 8.8% on Tuesday after a record $589 billion sell-off on Monday triggered by concerns over China’s DeepSeek AI model. Wall Street analysts defended Nvidia, calling the panic a “tech AI head fake,” and investors seized the dip as a buying opportunity.
DeepSeek’s AI Claims Under Scrutiny
DeepSeek shocked the AI sector by claiming to have developed its model for under $6 million, significantly less than the billions spent by OpenAI, Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Tesla (NASDAQ:TSLA). However, reports suggest DeepSeek relied on 50,000 Nvidia Hopper GPUs, which would have cost nearly $2 billion—undermining claims of an ultra-low-cost AI breakthrough.
Wall Street analysts remain skeptical:

Wedbush’s Dan Ives dismissed DeepSeek’s impact, calling it “AI’s Sputnik moment” but unlikely to disrupt Nvidia’s dominance.
Tigress Financial’s Ivan Feinseth upgraded Nvidia to ‘Strong Buy’, raising its 12-month target price to $220, citing AI-driven revenue and cash flow growth.

AI Spending Continues to Drive Nvidia’s Growth
Despite short-term volatility, Nvidia remains the leader in AI chip supply, benefiting from massive capital investments in AI infrastructure. Investors tracking AI sector valuations can utilize the Ratios (TTM) API to assess Nvidia’s valuation metrics and compare them with industry benchmarks.
With Nvidia at the core of AI’s expansion, analysts see Monday’s dip as a golden buying opportunity, reinforcing confidence in its long-term growth trajectory.