AI-Exposed Power Stocks Tumble Amidst DeepSeek's Advance
AI spending levels at US companies and their industry dominance came into question Monday following DeepSeek's introduction of an AI model that rivals chatbots from US tech giants.
Significant Declines in Power Stocks:
* Constellation Energy (CEG): -20.85%
* Vistra Corp (VST): -28.27%
* GE Vernova (GEV): -21%
* Oklo (OKLO): -25.61%
DeepSeek's Competitive Model:
* Released January 20th
* Viewed as competitive with models from OpenAI and other US tech companies
* Requires fewer AI chips, resulting in lower production costs
Impact on Power Demand:
* Big Tech's data centers have fueled demand for power stocks in recent years
* Goldman Sachs estimates a 160% increase in power demand by 2030
Analysts Cautious:
* Bernstein analyst Stacy Rasgon believes DeepSeek is not a "doomsday" for AI infrastructure
* Analysts expect clarity from major AI spenders Microsoft and Meta's earnings reports later this week
Impact on Chipmakers:
* Estimated 40% of Nvidia's revenue comes from Microsoft, Meta, and other tech giants
* Nvidia's outlook could be impacted by AI spending trends