Chip Stocks Rebound as DeepSeek AI Shakes Semiconductor Market

Chip stocks in the US and Europe rebounded following a decline incited by China's AI tool, DeepSeek. Though Nvidia slipped, European tech stocks surged due to an increase in bookings by ASML. DeepSeek's competitive AI tools marked a significant impact, with potential cost reductions in AI development.


Devdiscourse News Desk | Updated: 29-01-2025 20:19 IST | Created: 29-01-2025 20:19 IST
Chip Stocks Rebound as DeepSeek AI Shakes Semiconductor Market

On Wednesday, chip stocks across the United States and Europe experienced a resurgence, recovering from an initial decline earlier in the week. This downturn was brought about by China's economic introduction of its low-cost DeepSeek AI tool. While Nvidia saw its shares dip by 2.7% to close at $125.44, other tech stocks noticed gains, slightly offsetting a significant Nasdaq impact.

Europe's tech sector, however, saw a boost, driven by ASML's nearly 8% rise after the company reported a surprisingly high volume of new bookings. This uplift pushed an index of European tech stocks up by 3.2%, with contributions from BE Semiconductor and ASM International, which rose by 3.5% and 5.4% respectively.

The market upheaval, primarily affecting Nvidia, underscores ongoing shifts in the AI technology landscape, highlighted by DeepSeek's rise. Analysts suggest that this trend could pressurize chipmakers and energy sectors, though markets seemed to stabilize as investor attention turned towards US Federal Reserve policy outcomes and earnings reports from major tech players.

(With inputs from agencies.)

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