Will The DeepSeek-Frenzy Aided Recovery Last For Airdoc Technology Stock?

Airdoc Technology Co. Ltd. (2251.HK) has been on a rollercoaster ride since announcing the integration of DeepSeek's R1 AI model into its Wanyu Medical Large Model. The company's share price surged 21% in the 10 days following the news, reaching an eight-month high. However, investors are now wondering if this recovery is sustainable in the long term.

The DeepSeek frenzy has certainly boosted Airdoc Tech's stock, but there are several factors that could impact its sustainability:

1. Medical benefits and validation: While Airdoc Tech claims that the revamped model improves disease recognition accuracy, the company's website does not provide information on its use by medical partners. To sustain the share price surge, Airdoc Tech will need to demonstrate the medical benefits of the revamped model and obtain validation from medical professionals.
2. Competitive landscape: The field of AI-powered medical services is fiercely competitive, with many big tech names offering their own AI models for medical use. Airdoc Tech will need to differentiate its Wanyu model and maintain a competitive edge to sustain its share price surge.
3. Financial performance: Airdoc Tech has been mired in net losses for five straight years, despite rising revenues. To sustain the share price surge, the company will need to improve its financial performance and demonstrate a path to profitability.

In conclusion, while the integration of DeepSeek's model into Airdoc Tech's AI system contributed to a share price surge, the sustainability of this surge depends on the company's ability to demonstrate medical benefits, maintain a competitive edge, and improve its financial performance. Investors should closely monitor Airdoc Tech's progress in these areas to determine if the recovery will last.

Action Alerts PLUS, which Cramer manages as a charitable trust, is long AAPL.