AI Start-Up DeepSeek's Impact on Nvidia and Tech Stocks

The financial world is buzzing as AI start-up DeepSeek builds a competing model to Nvidia's technology. This development raises concerns among investors, as it may signal a shift in hardware landscapes, impacting Nvidia and related stocks' performance.

Date: 06-02-2025

AI Rating: 5

Potential Impacts on Stock Prices

DeepSeek's emergence in the AI sector, claiming it can build models using older Nvidia processors, has caused significant angst in relation to Nvidia's market position. If this trend continues, stock prices for Nvidia and associated companies may see downward pressure due to perceived obsolescence of their latest technologies.

Capex Insights from Big Tech

The analysis explored comments from significant Nvidia clients, including Microsoft, Tesla, and Meta Platforms, regarding their capital expenditures. These companies have indicated slowing growth rates in their AI-related capital spending. For instance, Microsoft expects growth in Azure's capex to be lower than in the previous fiscal year, while Tesla indicates flat capex for 2025 despite significant investments in AI infrastructure. Meta Platforms is still planning a substantial increase in capex, hitting $65 billion in 2025. This scenario creates mixed signals regarding future demand for Nvidia’s GPUs.

Close Relationship Between Nebius and Nvidia

Nebius Group, a data center company closely linked with Nvidia, is slated to construct a GPU cluster using Nvidia’s latest chipsets. Although Nebius has experienced a similar stock decline as Nvidia, its ongoing projects could shield it from some of Nvidia's misfortunes if Nvidia's core offerings remain in demand. This indicates a complex relationship where Nebius could still thrive despite Nvidia's challenges.

Conclusion: Weighing Opportunities

Investors may perceive the current sell-off in AI stocks, including those related to Nvidia and Nebius, as a potential buying opportunity. Big tech’s commitment to AI infrastructure spending signals that while growth rates may slow, the overall investment in the sector remains robust. Given this context, companies that rely on Nvidia’s technologies may still present viable investment opportunities despite current market fluctuations.

Stocks: NVDA MSFT TSLA META NBIS