AI Rivalry Sparks Billion-Dollar Turnaround in Tech Shares

Tech stocks surged on Tuesday, recovering from a massive downturn triggered by a low-cost AI model from China's DeepSeek. Nvidia gained 8.9% after a record one-day loss of $593 billion. Investors remain skeptical of DeepSeek's claims, but see potential in cheaper AI solutions. Market leaders like Apple and Microsoft also rebounded strongly.

On Tuesday, technology stocks rallied as investors sought bargains following a wipeout caused by a low-cost AI model from China's DeepSeek. Nvidia, a leading AI chip company, saw its shares rise by 8.9%, partially recovering from Monday's record $593 billion market value loss.

The sell-off raised questions about DeepSeek's cost claims as the market reacted to its entry with caution. However, analysts argue that cheaper AI models won't diminish the demand for high-performance chips, indicating the ongoing demand for advanced intelligence solutions.

Major tech firms like Apple and Microsoft contributed to the market's recovery ahead of their earnings reports, as investors speculated on capital spending and AI competition. DeepSeek's emergence disrupts the notion that Chinese companies trail their American counterparts in AI advancements.

(With inputs from agencies.)