Software Stocks in Vogue Again on DeepSeek’s Efficiency Promise
- Software developers could benefit from low cost AI computation
- Software stocks underperformed semiconductors since 2021
The trading desk at Goldman Sachs said companies such as Microsoft could benefit from more efficient AI computing.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
DeepSeek’s claim that it has found a lower cost way to create AI models has made software stocks a hot trade.
The sudden emergence of DeepSeek’s model at first sent stocks with deep ties to the AI revolution into a nose dive on concerns that efficiency improvements could lead to reduced hardware spending. Semiconductor and other AI infrastructure-related stocks tumbled on Monday. The Nasdaq 100 sank 3% and Nvidia Corp.’s 17% plunge erased $589 billion from its value — the largest such drop ever for a single stock. The S&P 500 semiconductors & semiconductor equipment sector fell 14% Monday.