DeepSeek's AI Surge Rattles Tech Stocks: A Golden Buying Opportunity, Says Wedbush Analyst

The tech sector is abuzz with the recent emergence of DeepSeek, a Chinese AI startup that has sent shockwaves through the market with its impressive large language model (LLM). The company's AI model, R1, has rivaled OpenAI's ChatGPT and Meta's Llama 3.1, raising concerns about the competitive landscape and the demand for AI chips, particularly Nvidia's GPU products. However, Wedbush analyst Daniel Ives remains unfazed, calling this sell-off a "golden buying opportunity" for investors.

DeepSeek's Surprise Move
DeepSeek, founded in July 2023 by Liang Wenfeng, a graduate of Zhejiang University, has taken the tech world by storm with its LLM. The company's AI model, R1, was launched last week and surged to the top of Apple Inc's AAPL App Store, rivalling OpenAI's ChatGPT and Meta Platforms Inc's META Llama 3.1. According to DeepSeek, the model was built in just two months for under $6 million, using restricted Nvidia Corp NVDA chips. This achievement has raised eyebrows and sent tech stocks tumbling, with heavy pressure on the Nasdaq and AI darlings like NVDA feeling the heat.

Wedbush's Bullish Stance on AI Stocks
Wedbush analysts view the technology selloff this morning as a "golden buying opportunity." They argue that no U.S. global 2000 company will use a Chinese startup like DeepSeek to launch their AI infrastructure and use cases. Instead, the focus of AI right now is on enterprise use cases and broader infrastructure, which is driving $2 trillion in capital expenditure over the next three years. The real AI arms race is in AGI, robotics, and autonomous tech, where DeepSeek simply can't compete.

Ives believes that this is just another moment for nervous traders to sell and for long-term investors to load up on AI elite companies like Nvidia, Microsoft Corp MSFT, Alphabet Inc GOOGL GOOG, and others. He sees an opportunity to own the NVDA, MSFT, AAPL, GOOGL, GOOG, PLTR, CRM, AMZN, ORCL, and SNOW ecosystem that is under heavy pressure today.

DeepSeek's Achievement: Impressive, But...
While DeepSeek's reported achievement is impressive, Ives sees it as a speed bump, not a roadblock. The focus of AI right now is on enterprise use cases and broader infrastructure propelling this $2 trillion of Cap-Ex over the next 3 years. The real AI arms race is in AGI, robotics, and autonomous tech—territory where DeepSeek simply can't compete. Ives said this is just another moment for nervous traders to sell and for long-term investors to load up on NVDA, MSFT, AAPL, GOOGL, GOOG, PLTR, CRM, AMZN, ORCL, and SNOW.

DeepSeek's Impact on AI Chip Demand
DeepSeek's impressive feat has raised questions about the demand for AI chips, particularly Nvidia's GPU products. The company's ability to build a competitive LLM using less powerful and restricted Nvidia chips could lead to a decrease in demand for high-end GPUs. This could impact NVDA's sales and market share in the GPU segment. However, Wedbush remains optimistic about the AI revolution's long-term prospects, believing that the focus on enterprise use cases and broader infrastructure will continue to drive demand for AI chips.



In conclusion, DeepSeek's emergence has sent shockwaves through the tech sector, raising concerns about the competitive landscape and the demand for AI chips. However, Wedbush analyst Daniel Ives remains bullish on AI stocks, viewing this sell-off as a "golden buying opportunity." While DeepSeek's achievement is impressive, its impact on enterprise use cases and the AI arms race may be limited, as established players continue to invest heavily in AI development and maintain their competitive edge. Investors should consider capitalizing on the current market volatility to buy more shares of AI elite companies like NVDA, MSFT, AAPL, GOOGL, GOOG, PLTR, CRM, AMZN, ORCL, and SNOW before they potentially revisit their recent highs.