Tech stocks stage partial recovery after market rout sparked by DeepSeek's rise
Jan 29, 2025 - markets.businessinsider.com
Nvidia's stock rebounded by nearly 9% on Tuesday after an 18% plunge on Monday, driven by the rise of Chinese AI startup DeepSeek, which disrupted tech markets. The recovery helped Nvidia regain a market cap above $3 trillion. The tech rout, sparked by DeepSeek's challenge to AI market narratives, saw AI-related stocks partially recover, with Nasdaq futures up 0.4% and S&P futures showing modest gains. Investors viewed the sharp declines as buying opportunities, shifting focus to the upcoming Federal Reserve meeting on interest rates.
ASML, a chip equipment maker, saw a 10% rise in Amsterdam trading, while Taiwan's TSMC increased by 1.3%. ASML's CEO, Christophe Fouquet, noted that cheaper AI models like DeepSeek's could boost demand for chips by enabling more applications. DeepSeek's AI model, R1, offers advanced reasoning capabilities at a lower cost compared to OpenAI's model, potentially increasing AI adoption and chip demand.
Key takeaways:
Nvidia stock rebounded by closing almost 9% higher on Tuesday after a significant drop on Monday.
The rise of China's AI startup DeepSeek caused a tech market disruption, impacting AI-related stocks.
ASML and TSMC saw gains, with ASML's CEO viewing cheaper AI models as a potential opportunity for increased chip demand.
DeepSeek's AI model R1 offers advanced reasoning at a lower cost, challenging existing AI market dynamics.
