News from Chinese artificial intelligence startup DeepSeek has sent the stock of Nvidia and some of its peers plummeting, prompting CNBC’s Jim Cramer to advise investors to sit on their hands and make no sudden moves. According to Cramer, now is neither a buying nor a selling opportunity because investors don’t know enough about the situation.
Cramer noted that while some analysts were caught off guard by the rapid developments surrounding DeepSeek, the tech sector has long believed that Big Tech would need to spend billions on the latest and greatest AI models to keep running. The Chinese company’s claim that its models rival those of industry favorites like OpenAI and cost less to operate has sent shockwaves through the market. Nvidia’s shares have plummeted almost 17 percent, shedding almost $600 billion in market capitalization in the biggest one-day loss in US history.
Cramer identified other stocks that saw significant losses, including energy names such as Constellation Energy, Vistra, Vertiv, and GE Vernova, which he described as “overheated.” While Nvidia has acknowledged DeepSeek’s AI advancements, the company emphasized that many of its chips and networking capabilities will still be necessary. However, Cramer remains skeptical, saying that reassuring statements from Nvidia may not be enough to rekindle investors’ faith in the AI boom.