#DeepSeekImpact "We don't know how much of returns we're going to get off these AI investments. Everybody's second-guessing what we have been doing for the last 18 months to two years, which is buying indiscriminately" in to AI stocks, said Kim Forrest, chief investment officer at Bokeh Capital Partners

"The Street is bullish in the long run, but in the short- to medium-term, things are uncertain."

On the European side, the U.S.-traded shares of Dutch semiconductor company ASML (ASML.AS), opens new tab were down 1.6% on Tuesday after falling almost 6% on Monday.

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The selloff is a reminder of how much investor capital is concentrated in such a small number of stocks that trade at a large premium to the rest of the market.

Before Monday's rout, Nvidia's shares were trading at nearly 60 times the value of its earnings, compared with 22 for the entire S&P 500, according to LSEG data.

The hype around AI has powered a huge flow of capital into equities, leading to an increase of around $10 trillion in the market value of "Magnificent Seven" companies since ChatGPT kicked off the AI boom in November 2022.

However, the slide of Nvidia's valuation multiple to its lowest in a year, at 26.76, attracted retail investors.

Data analytics firm Vanda Research showed that retail investors took advantage of the selloff in Nvidia to snap up a record net $562.2 million in the company's stock on Monday. Buy orders from retail orders outnumbered sell orders by 2:1 ratio on Monday, according to J.P.Morgan data.