this post was submitted on 28 Jan 2025
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Summary

Global tech stocks plunged after the launch of DeepSeek, a low-cost AI model by Chinese startup DeepSeek, sparked investor concerns over the dominance and valuation of AI giants like Nvidia.

Nvidia shares fell 17%, wiping $593 billion in market value—the largest single-day loss for any company.

The selloff impacted chipmakers, AI firms, and datacenter companies globally.

Analysts view DeepSeek's cost-efficient model as intensifying competition, potentially challenging U.S. tech dominance.

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[–] [email protected] 4 points 3 days ago (1 children)

While I understand your point here, but a 10% drop amongst tech companies should not be a huge drop for a properly diversified 100% stock based global index fund.

A 10% drop in general is expected for index funds, that's why you should have a long time horizon. If a drop of 50% is more than you can handle then the stock allocation should be lowered from 100% and bonds increased by the same amount. S&P500 is not enough diversification, not nearly enough. Funds that track MSCI ACWI is a lot better in terms of diversification, and diversification is the ONLY free meal in investing.

[–] [email protected] 3 points 2 days ago

Oh, a 10% drop is not super concerning. It's more "what happens next." The magnificent 7 have gone through the roof in terms of valuation since 2022... should those come back to Earth abruptly, it's not just tech bros who suffer.