What Is the Jevons Paradox and How Does It Make Nvidia Stock a Buy After DeepSeek's Revolutionary Breakthrough?

After DeepSeek's R1 model was released, it ignited a panic among stocks associated with artificial intelligence (AI). The Chinese startup reportedly trained its model for only $5.6 million, making many question why U.S. companies are pouring billions of dollars into computing power. This caused Nvidia's (NASDAQ: NVDA) stock to fall by nearly 20%. Nvidia is the primary beneficiary of AI spending in the U.S., as most AI models are trained on its hardware. In fact, DeepSeek's R1 model was trained on Nvidia's H800 chips (the more powerful H100 chips aren't available in China due to export bans). I see this drop as a buying opportunity, not a time to sell. There's a specific behavior that occurs after a breakthrough in efficiency known as the Jevons paradox, and I think all investors should familiarize themselves with it.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool