News: China's DeepSeek AI model shocks Wall Street, Nvidia stock plunges but positive news from Meta and Microsoft. Negative

From Nasdaq: 2025-02-03 03:50:00

China’s DeepSeek shocks Wall Street by training an AI model for less than $6 million that matches top U.S. models. Nvidia stock plunges, losing nearly $600 billion in market value in a day. Concerns arise that U.S. companies will spend less on Nvidia GPUs, but positive news from Meta Platforms and Microsoft may ease worries.

Meta Platforms plans a 66% increase in capital expenditures to $65 billion in 2025 for generative AI efforts. CEO Mark Zuckerberg sees heavy AI investments as a strategic advantage. Microsoft CEO Satya Nadella expects exponentially increasing demand for AI as it becomes more efficient and accessible, benefiting Nvidia in the long run.

The Jevons paradox predicts increased demand for AI software and services due to more efficient training methods, potentially benefiting Nvidia despite initial concerns. Morgan Stanley analysts raise AI infrastructure spending estimates for major tech companies. Wall Street analysts still have a positive outlook on Nvidia, with a median target price of $175 per share.

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Read more at Nasdaq: Nvidia Stock Investors Just Got Good News From Meta Platforms and Microsoft