Nvidia (NASDAQ: NVDA) benefited enormously from the increased investment in chips for artificial intelligence (AI), but news out of China is causing investors to wonder if the stock's high valuation is worth it ahead of potential risks to the massive investment big tech companies have put into data center infrastructure.

While the demand is there, it's clear that's not the sole reason why Nvidia's RTX 50 series is impossible to find in stores. Many retailers received fairly low stock quantities, as Nvidia reportedly experienced manufacturing issues.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

Shares of Nvidia (NASDAQ: NVDA) spiked Tuesday. The company's stock gained 8.9% as of market close. The move up comes as the S&P 500 and Nasdaq Composite gained 0.9% and 2%, respectively. Nvidia's stock felt some relief after a major sell-off on Monday that was spurred by a new AI entrant,

A Chinese startup’s latest affordable artificial intelligence (AI) chatbot sent NVIDIA Corporation’s NVDA shares into a tailspin, erasing half a trillion in market capitalization. However, the widespread anxiety among NVIDIA investors is overblown.

US stocks and shares in chip-making giant Nvidia on Tuesday clawed back some of their losses following a steep sell-off a day earlier triggered by the sudden success of Chinese artificial intelligence firm DeepSeek.

Fears regarding the rise of artificial intelligence (AI) chatbot DeepSeek may be overblown. The post Why Nvidia stock just rallied appeared first on The Motley Fool Australia.