A recent surge in AI stocks took a hit as investors worried about the implications of a sophisticated, cost-efficient AI model from Chinese start-up DeepSeek. The high-performance model, which can be trained for around $6 million, has sparked concern that useful AI may not require expensive hardware.
Nvidia, the leader in AI infrastructure spending, was particularly hard hit, with its shares tumbling 17% on Monday and ending the week 16% lower. Analysts at Bank of America see DeepSeek as “AI’s Sputnik moment” that could fuel more AI investment beneficial to Nvidia.
However, some analysts warn that DeepSeek’s success could temper enthusiasm for AI infrastructure spending, compelling the Trump administration to increase semiconductor export controls. Meta Platforms, on the other hand, was a beneficiary of DeepSeek, with its shares rising 6.4% last week.
Software stocks advanced, driven by expectations that lower computing costs will widen margins and enable companies to develop more affordable AI models. ServiceNow, an enterprise software company, saw its shares rise 4% in the first two sessions of the week before plummeting 11% on disappointing quarterly results.
Source: https://www.investopedia.com/stock-market-winners-and-losers-of-deepseek-ai-upheaval-nvda-meta-now-8783765