Wall Street Breakfast DeepSeek deep sixes stocks
Jan 27, 2025
In a shakeup for AI stocks, DeepSeek's new model is stirring up investor concerns over cost and demand. Bond yields are taking a nosedive as cash flows to safer investments. Meanwhile, analysts are spotting potential buying opportunities amidst the volatility. The discussion also highlights how the recent Nvidia selloff has altered market dynamics, offering fresh insights on tech valuations. As the dust settles, the Dow is surprisingly starting to look more appealing.
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Impact of DeepSeek
DeepSeek's introduction of an affordable AI model disrupts existing market assumptions. This could fundamentally alter pricing power and capital expenditure trends in the AI ecosystem.
Buying Opportunity
Consider investing in AI stocks amid the current sell-off as it may represent a buying opportunity. Analysts suggest that skepticism about DeepSeek's cost claims could stabilize the market.
Contradictory Funding Requests
The Chinese government's significant AI funding request contrasts sharply with DeepSeek's claim of low development costs. This discrepancy raises questions about the sustainability of their business model.