Monday’s events may wind up being a blessing in disguise for investors. The Nasdaq Composite and S & P 500 sold off in the previous session, losing 3.1% and 1.5%, respectively. The slump came as Nvidia tumbled 17% — losing the most market value in one day ever for a U.S.-traded company — as traders fretted over Chinese startup DeepSeek developing an artificial intelligence model for a fraction of what U.S. tech giants are spending. DeepSeek last week released an open-source AI model that has reportedly outperformed OpenAI ‘s in certain tests. The AI lab said its initial model cost less than $6 million to develop, raising concern over how much companies actually need to spend on high-powered semiconductors such as those made by Nvidia. But DataTrek Research co-founder Nicholas Colas sees all this as positive. “Almost 80 percent of [Monday’s] DeepSeek-related S & P 500 selloff was due to Nvidia. Apple , Meta , and Amazon were up. Microsoft / Alphabet were down, but not horribly so,” he said. “The market is telling us that cheap, open source AI is a good thing. Less AI-related CapEx means larger buybacks and higher dividends from established companies that can market useful AI tools to large global user bases,” Colas added. “Their past investments are sunk costs, irrelevant to tomorrow’s stock prices. AI is now a product development and marketing challenge, not a sinkhole for capital.” Even Nvidia itself recognized DeepSeek’s R1 model as ” an excellent AI advancement .” Against this backdrop, Wells Fargo strategist Christopher Harvey advised clients against dumping their stock holdings after Monday’s rout. “It is possible that there has been a foundational overspend, but it remains unclear,” he said in a note. “If AI developments costs are much lower than anticipated, we would expect innovation and productivity enhancements to occur even quicker than previously believed. This would have significant ramifications for EPS growth, inflation and (potentially) the cost of capital.” Some investors are buying the dip early Tuesday. Nvidia shares ticked up about 3% in the premarket along with Marvell Technology and Broadcom — both of which sold off alongside Nvidia Monday. Elsewhere Tuesday morning on Wall Street, Barclays upgraded Victoria’s Secret to overweight from equal weight, calling for more than 40% upside. “While we missed the stock move off its mid-2024 lows, we now have greater confidence in meaningful top-line acceleration and operating margin expansion,” analyst Adrienne Yih told clients. “We believe consensus estimates are too low and will be revised upwards over the next 12 to 24 months. And where estimates go, the stock should follow.”