Nvidia shares bounced 5% in overnight trading. Nvidia on Monday said Chinese AI firm DeepSeek's advances show the usefulness of its chips for the Chinese market and that more of its chips will be needed in the future to meet demand for DeepSeek's services.

Other chip stocks also rallied. Broadcom, Marvell, SOXL, Super Micro up more than 3%.

Fears around the future of the artificial intelligence trade pushed Nvidia shares down by nearly 17% on Monday and weighed on the stock market — but investors seem to be overreacting, according to Tom Lee, head of research at Fundstrat Global Advisors.

Lee said he would be “personally surprised if Nvidia became Betamax in the past week” — referring to the now-obsolete video cassette recording format that lost to its rival VHS — and that that would be the only situation that would justify selling the chip giant’s shares to the degree seen Monday.

To be sure, Lee also said time will tell if the sell-off will bear fruit and turn out to be a longer-term trend for the chipmaker. For now, he said, he stands by his view that Nvidia’s slide is a buying opportunity.

Nuclear stocks also rallied in overnight trading. Oklo Inc. up 9.3%; NuScale Power up more than 5%; NANO Nuclear Energy, Vistra Energy up more than 4%.

Concerns about the AI startup DeepSeek are battering a corner of the energy market that's been vying to be the power source of choice for the booming artificial intelligence industry in the US.

Nuclear power stocks were caught in Monday's steep sell-off, tumbling even further than many of the top tech names that plunged amid fears that China's DeepSeek app could challenge the narrative that helped prop up markets for years.

Nuscale Power Corp, one of the market's best-performing nuclear energy stocks in 2024, dropped as much as 27.5%. Vistra Corp, another nuclear power provider, dropped as much as 28%, while Constellation Energy Corporation dropped 21%.