This article comes from Yahoo Finance
The concept of artificial intelligence in U.S. stocks broke out in a small stock market crash. Nvidia plunged nearly 17% and closed the market value evaporated by US$589 billion, the most in a single day in U.S. stock history; many chip stocks fell by double digits, and the Nasdaq index fell by 3%. Money poured into cyclical stocks and stocks less related to AI, and the Dow Jones index fell nearly 300 points to close. China’s generative AI model, DeepSeek, is open to public use, shocking the technology community and Wall Street, making the market worry about whether future demand for advanced chips will be worse than expected.
Chip maker Nvidia, which has always been regarded as indispensable for AI development, closed down nearly 17%, while ultracomputers, Broadcom, Agency Industrial and Commercial TSMC, equipment manufacturer ASML and designer ARM fell double digits. Cloud computing companies also fell significantly, with Google down 4% and Microsoft, which has always supported OpenAI, down 2.1%.
DeepSeek claims to use far fewer chips and power resources than currently popular OpenAI, Claude, etc., and does not need to use top-level chips. However, the test scores are quite good. In the first weekend, the number of free program downloads in the Apple App Store surpassed ChatGPT to top the list. Later, it even restricted the registration of new phone numbers because it claimed to have been attacked by a network. Although there are rumors that the company behind DeepSeek actually owns 50,000 advanced chips banned by the United States, DeepSeek’s performance has caused market participants to question whether technology companies need to maintain current investment levels to develop AI in the future.
Power stocks, especially nuclear power stocks, were dragged down. Oklo, Constellation Energy and Vistra, which were invested by OpenAI President Sam Altman, all fell more than 20%.
Wall Street has different interpretations of DeepSeek’s impact. Bernstein analysts believe that DeepSeek’s progress is not enough to cause panic among ultra-large companies in the United States. The efficiency gains DeepSeek is achieving may drive higher demand for computing power rather than reducing long-term expenditures. Analysts also pointed out that its strategy may not be unknown to other top AI laboratories, so such innovations may not be completely unique.
Bernstein also pointed out that Meta’s increased capital expenditures, the Stargate plan and China’s US$140 billion AI spending plan all indicate that investment in the AI field is accelerating.
JPMorgan Chase said that there is no need to worry too much about DeepSeek’s R1 model. On the contrary, there are investment opportunities behind the turmoil, because if DeepSeek’s AI assistant can be widely used in notebooks and even smartphones with low computing power, bringing AI technology into the consumer market, then this will constitute a very favorable development trend for the semiconductor equipment industry.
The bank believes that it can take advantage of the low price to absorb European semiconductor equipment companies such as ASML, ASMI and VAT.
Deutsche Bank believes that the valuations of many U.S. technology stocks are extremely high, and the valuations of some chip manufacturing industries are higher than those of more mature and comprehensive stocks such as the “Big Seven”; the emergence of the DeepSeek model of China’s artificial intelligence has made investors rethink the prospects of chip stocks and question the sky-high valuations they are willing to pay. The bank said that the emergence of DeepSeek AI shows that semiconductor demand is growing rapidly or will slow down.
Oil tubing: