AI Advancements Spark Sell-Off in Power Stocks
AI-exposed power stocks plummeted Monday as concerns arose over spending levels at US companies and their market dominance.
Key Takeaways:
* Constellation Energy (CEG) plunged 21%, while Vistra Corp (VST) sank 28%.
* GE Vernova (GEV) and Oklo (OKLO) also experienced significant declines.
* DeepSeek, a Chinese start-up, released a competitive AI model at a lower cost.
* Wall Street analysts believe DeepSeek's capabilities are not revolutionary.
* Earnings reports from Microsoft and Meta this week may provide further clarity.
Background:
Big Tech's demand for data centers has driven growth in power stocks. Constellation Energy signed a deal with Microsoft and Meta announced plans to explore nuclear energy options.
Analyst Reaction:
Analysts downplayed the market reaction, emphasizing that DeepSeek's advancements are not groundbreaking.
Impact on Chipmakers:
Nvidia, which relies heavily on revenue from AI data center providers, may be affected by the outlook of Microsoft and Meta.