Following a painful selloff at the beginning of the week due to China’s low-cost DeepSeek artificial intelligence technology, chip stocks in the US and Europe increased Wednesday for a second consecutive day.
However, Nvidia’s stock fell 2.7% to $125.44, which had an impact on the Nasdaq. Although the stock closed Tuesday’s trading session 8.9% higher, it was still well below Friday’s close of $142.62 and the January 7 record high of $153.13.
The roughly 8% increase in ASML following the Dutch semiconductor equipment manufacturer’s announcement of an unexpectedly high increase in new bookings contributed to the spike in European tech equities.
ASML drove a 3.2% increase in an index of European tech companies, while chipmakers BE Semiconductor and ASM International saw 3.5% and 5.4% increases, respectively.
US peers including Applied Materials, Lam Research, and KLA Corp saw more moderate gains, rising between 0.9% and 2%. There was a 0.1% increase in the Philadelphia chip index.
The appearance of DeepSeek’s AI tools as potential rivals to industry leaders like OpenAI’s ChatGPT, along with the indication that development costs may be rapidly declining, hurt AI-related stocks on Monday and depleted the market value of semiconductor, power, and equipment companies by almost $1 trillion.
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