his Tuesday, tech shares were brought back closer to what they were looking, also regaining ground that was lost with AI chip leader Nvidia. The chip manufacturer
closed up by 8.9% as some of its investors shopped for bargains after the record-breaking wipeout caused by DeepSeek. The Chinese artificial intelligence model caused an immense reaction due to its power to affect the US dominance.
On Monday, Nvidia lost nearly 17%, or close to $593 billion, in market value, setting a record for a one-day loss in any company’s history. Meanwhile, shares in industries such as semiconductor, power, and infrastructure companies that were exposed to artificial intelligence, collectively shed more than $1 trillion.
The selloff that took place on Monday hammered many tech stocks worldwide. The main reason was the release of DeepSeek's free AI model. The AI assistant needs less data and uses even less power. DeepSeek drew the attention of many investors worldwide, but its price and functionality also sparked skepticism.
However, the technology sector rebounded by 3.6% on Tuesday after falling by 5.6% only one day before. Even more so, the Philadelphia semiconductor index rose 1.1% on Tuesday after falling 9.2% in the prior session, marking its deepest one-day drop since March 2020.
JJ Kinahan, the president of Tastytrade Brokerage in Chicago said “Yesterday was an initial reaction. Today investors are asking if anybody did any sort of homework and made sure DeepSeek is exactly what they say it is. Can we have more proof that they really built it for so much less?”
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It’s also worth noting that Nvidia shares closed on Tuesday at $128.99 which is well below Friday’s $142.62 close. Oracle came with 3.6% after it had a following of 13.8% on Monday. Even more so, Marvell Technology shares rose 3.5% after previously falling 19%.
Broadcom also gained 2.6% on Tuesday after it fell by 17.4%on Monday. Point72 Asset Management’s founder, Steven Cohen, said in a statement that "what happened with DeepSeek is actually bullish because it advances the move to artificial intelligence."
Sam Altman, CEO of ChatGPT, said in a social media post “We will obviously deliver much better models and also it's legit invigorating to have a new competitor”
By
Alice Brasoveanu
•
January 29, 2025 10:20 AM
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