According to several analysts on Wall Street, the sell-off on Monday was triggered by the rise of DeepSeek. This situation presents a potential buying opportunity for undervalued AI stocks.
The increase of an application from the Chinese AI startup DeekSeek, which dethroned an OpenAI app from the top of Apple’s most downloaded free U.S apps list. It also sent Nvidia (NVDA) and a host of other AI-related tocks into a downward spiral which caused the tech-heavy Nasdaq Composite to fall by over 3%.
This decline was a result of the worries that the model of DeepSeek could outperform its American counterparts while making use of less computing power. It sparks doubts about the demand for costly AI technologies.
However, some analysts view this situation as a chance to capitalize on the op. Wedbush analysts have labeled it as a ‘golden buying opportunity’.
According to the analysts, this is an excellent buying opportunity for investors who are looking to acquire shares in Nvidia, Alphabet (GOOGL), Microsoft (MSFT), Palantir (PLTR), and other giants within the U.S. AI landscape.
The analysts have acknowledged the achievements of DeekSeek as impressive, however, they have also expressed skepticism about major U.S. firms adopting Chinese startups like DeepSeek for their AI infrastructure.
They have focused on creating a competitive large language model which is good for consumer applications is one thing. However, developing a comprehensive AI infrastructure is a completely different challenge and nothing about China’s DeepSeek points towards a shift in that dynamic. Bernstein analysts have labeled the response from the market as overblow, maintaining a positive outlook on AI stocks within their coverage. It is especially for Nvidia and Broadcom (AVGO). They upheld the ‘outperform’ rating for these stocks as well as for Qualcomm (QCOM) and Applied Materials (AMAT).
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