(Bloomberg) – For a better part of two years, artificial intelligence technologies were a gift for US investors. The NASDAQ 100 has increased by 92% since the beginning of 2023 and has added more than $ 14 trillion worth and has millions of billions for a handful of technological executives and founders.
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Last week alone, the S&P 500 was powered to another record thanks to the large extent of more AI hype, this time from an oval office in the form of $ 500 billion in planned investments. President Donald Trump said the US as global leader AI – a few would have attacked a long time before he said. NVIDIA CORP. She had the best chips. Meta Platforms Inc., Openai and other American technical giants had significant leadership in the development of robots that would drive them.
Then Deepseek, a Chinese startup, whose AI platform seems to look as good as anything on the market for a fraction of the price and a piece of energy consumption.
NASDAQ 100 dropped 3%on Monday, at most six weeks, so it was virtually flat for a year and worth almost $ 1 trillion less than Friday. Nvidia had its worst day since March 2020, when the pandemic intervention lost almost $ 600 billion in market value in the largest erase in history. Energy companies were expected to benefit from unprecedented AI demand, led by 21% beatdown for Constellation Energy Corp.
Suddenly, the assembly, largely predicted to American dominance, has changed to the question of whether hundreds of billions in AI investment would ever lead to a sufficiently large profit to justify the rich awards provided by Megacap shares. The group accounts for 30% of the S&P 500 weighing, more than ever in history.
“Today's moves show how uncertain this market is,” Max Gokhman, senior vice president Franklin Templeton Investment Solutions. “When the valuation stretches to the sky, it is easier for small tremors to make the whole market.”
The latest AI Deepseek model increased to the top of AppStore charts at Apple AppStore's top and introduced a visible challenge to more expensive models such as OpenIi, and raising questions over hundreds of billions of planned technology expenses similarly META, Microsoft Corp. and Alphabet Inc. Nvidia, whose shares have risen nine times in the last two years, has fallen by 17%.
“Deepseek shows that it is possible to develop powerful AI models that cost less,” said Vey-Sern Ling, CEO of Union Bancaire Privee. “It can potentially derail an investment case for the entire AI supply chain, which is driven by high expenditures from a small handful of hyperscalers.”
Nvidia, in terms of part, downplayed the threat from Deepseek and indicated that “excellent progress AI” that suits American technological exports. While most of the best NVIDIA products cannot be sold to Chinese companies, its statement points out that the conclusion, working with the operation of AI models, it still needs many of its products.
“Inference requires a significant number of NVIDIA GPUs and high -performance networks,” the company said.
Routa in Nasdaq comes at the beginning of a big week for earnings from the main technology companies, including Apple and Microsoft, while investors have already been ready to explore massive payback capital expenditures that have so far been compared to.
Certainly, Selloff in the American markets was relatively proper despite the megacap tech megacap. The S&P 500 distributed its losses to less than 1.5%, with more than 350 its members – stressed that the damage was mostly contained in the AI industries. The industrial average Dow Jones increased by 0.7%, with only seven members ended in red.
Analysts said some companies like Salesforce Inc., banks and the main retailers – companies expected to use AI shoes rather than develop them – benefit from Deepseek's approach with an open source code if they can deploy AI for a fraction What else would cost.
At the same time, there is more on the market than Tech and AI. The federal reserve system will begin its two -day political meetings on Tuesday, and officials expect to maintain stable rates as the battle of inflation continues. And Trump's deregulation is pushing and plans to extend deep tax cuts that have the potential to stimulate growth, albeit at risk of inflation.
Regardless, Shockwave from the latest Iteration Deepseek, which was released last week, caused a re -evaluation of how to value anything related to AI. This is widely considered competitive with the latest OpenI and Meta offers. Deepseek's application, which was praised by investor Marce Andreessen as “one of the most amazing and impressive breakthroughs”, shows his work and justification because he deals with a written question or user challenge.
“We don't know whether it is” Sputnik Moment “for stocks, but that's definitely a wake -up that we're not the only game in the city,” Paul Nolte, the market strategist and the head manager of Murphy & Sylvest Wealth Management, he said. “This requires that many investors look at AI in a different way: to bring these very high valuation in stocks that they think that the market in the corner is a huge mistake, and that is evaluated again.”
NASDAQ 100 is traded about 27 times estimated earnings within a three -year average 24 times. Nvidia is 33 times, although it is slightly from its three -year average.
The Deepseek edition evokes new doubts and challenges the idea that Chinese technology AI is years for American counterparts. Trade restrictions in Washington kept the top chips from Chinese hands, but Deepseek's model was built using open source technology that is easily accessible.
“While contemporary leaders like NVIDIA have strong support, it is a reminder that AI dominance cannot be taken for granted,” said Chanaa, the main investment strategist at Saxo Markets. “The emergence of the Chinese deep seeker suggests that competition intense, and although this may not be a significant threat now, future competitors will develop faster and questioned established companies faster. Earnings this week will be a huge test. ”
-Be help from Bradham, Jan-Patrick Barnert, Subrat Patnaik, Abhishek Vishnoi, Winnie Hsu and Michael Msika.
(The previous version of this story has been fixed to fix the error named Meta.)
