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NVIDIA's shares might have been the victim of short selling during the DeepSeek selloff last month, speculated investment firm Navellier & Associates. Navellier's chief investment officer Louis Navellier and trading activity firm MAPsignals founder Jason Bodner discussed the DeepSeek selloff during Navellier's weekly podcast earlier this week. During the podcast, Navellier speculated that since DeepSeek had failed to live up to performance expectations, it appeared that the narrative used by short sellers to drive down NVIDIA stock had dried down.
DeepSeek Might Have Cost As Much As $500 Million To Train, Says Market Researcher
Navellier's comments about NVIDIA's stock performance during the DeepSeek selloff came after he was asked about DeepSeek's application "not working well." He started by pointing out that the "DeepSeek announcement was timed during the NFC AFC football playoffs" and ended up impacting a set of stocks negatively during premarket. Since the selloff started in the premarket, the investment firm head was certain that during this time, he believes it's guaranteed that "your average trader's watching those football games."
Navellier speculated that the narrative of DeepSeek being an upstart Chinese company able to "do what OpenAI and ChatGPT can do a lot cheaper and a lot more efficiently" was "done to just hit the market since the application is not working well since the selloff. "It's crashing the cloud constantly," he added, which suggests that "whatever narratives the short sellers were using are now over."
Bodner added color to Navellier's statements. While accepting that "I also love a good conspiracy every now and then," he added that "everything coming out of China we have to take with a grain of salt."
Pointing out that DeepSeek founder Liang Wenfeng's hedge fund had $8 billion in assets under management, Bodner commented that "Anything that comes out of China, an announcement like this where someone's going on TV, with an interview, and you have video to see it, has to be controlled, metered, and blessed and approved by the state media, by China.'
He also shared that while the 'news' of DeepSeek using just $5.6 million to run its model had rippled through the market, the reality was that it "was only part of the training budget." According to Bodner, "Now it's coming out that supposedly it could have cost as much to train as $500 million. Which would put [it] more expensive than OpenAI."
Bodner added that as "you cannot short stocks in China" and as shorting is legal in the US, one should "be open to the possibility" that the DeepSeek scare was "a China state organized PR blitz in an illiquid time" with the short sellers coming " in a championship game. . .short[ing] the market, cover[ing] it, and mov[ing] on with [their] day and mak[ing] a bunch of money."
Like Navellier, Bodner also mentioned reports of the cloud crashing and DeepSeek maybe not being as good as it was to bolster further the possibility that the selloff saw short-seller involvement. He concluded by stating that "to have such massive market cap adjustments for NVIDIA and some of the other AI stocks, it looks to me like it was a raid."
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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