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The technology sector, which had been enjoying a huge AI boom, saw a bloodbath on Monday, triggered by the emergence of DeepSeek, a China-based artificial intelligence (AI) startup that threatens to disrupt American dominance. The launch and increasing popularity of DeepSeek have raised concerns about the future market share of established tech giants, leading to substantial declines in their stock valuations. Notably, DeepSeek triggered a $1 trillion sell-off in U.S. and European technology stocks in a single day.
Market Impact
The tech-heavy Nasdaq 100 dropped as much as 3.6%, with semiconductors and the most popular names of the AI trade seeing the biggest losses. The Philadelphia Semiconductor Index tumbled 9.2% — its largest percentage drop since March 2020. AI darling NVIDIA NVDA plummeted nearly 17%, wiping about $600 billion in market value — the largest single-day loss in U.S. stock market history (read: NVIDIA Regains Momentum on AI Growth: ETFs to Tap).
Chipmakers Broadcom (AVGO) and Advanced Micro Devices (AMD) plunged more than 17% and 6%, respectively. Micron (MU) and Arm Holdings dropped more than 11% and 10%, respectively. Constellation Energy (CEG) and Vistra (VST), two of the best-known derivative plays tied to the power buildout for AI, plummeted more than 20% and 28%, respectively.
Meta Platforms (META) and Microsoft (MSFT), each of which pledged $65 billion for AI infrastructure in 2025, fell 3.1% and 3.8%, respectively. Google parent Alphabet (GOOGL) lost 4.2%. Notably, Alphabet lost $100 billion in market cap, while Microsoft lost $7 billion.
ETF Performance
Among the worst performers in the tech ETF space, single-stock ETFs declined the most with GraniteShares 2x Long SMCI Daily ETF SMCL, YieldMax NVDA Option Income Strategy ETF NVDY and YieldMax TSM Option Income Strategy ETF TSMY tumbling 25.3%, 16.8% and 13.3%, respectively.
Semiconductor ETFs — VanEck Fabless Semiconductor ETF SMHX, Columbia Semiconductor and Technology ETF SEMI, Invesco Semiconductors ETF PSI, Strive U.S. Semiconductor ETF SHOC and VanEck Vectors Semiconductor ETF SMH —declined in double digits in a single day.
AI ETFs were also in deep red. VistaShares Artificial Intelligence Supercycle ETF AIS recorded a 9.4% decline, followed by declines of 8.4% for iShares Future AI & Tech ETF ARTY, 7.7% for iShares A.I. Innovation and Tech Active ETF BAI and 7.2% for TCW Artificial Intelligence ETF AIFD (read: AI and Robotics ETF Hits New 52-Week High).
Other tech ETFs such as VanEck Vectors Digital Transformation ETF (DAPP), SPDR Galaxy Transformative Tech Accelerators ETF TEKX and iShares Blockchain and Tech ETF IBLC lost more than 13% each.