Shares of Apple (AAPL) and Meta Platforms (META) both jumped more than 2% on Monday, bucking the trend of their Magnificent Seven peers and providing some relief for tech investors amid a sell-off strong in AI and related names after the publication of the publication of The new profitable AI model of the Chinese company Deepseek.
In an email on Monday, DA Davidson analyst Gil Luria told Yahoo Finance: “Apple is reacting positively to the Deepseek news because smaller, more efficient models mean it will be able to have better AI products on iPhone.”
Meta CEO Mark Zuckerberg said Friday the company is spending up to $65 billion this year on AI investments. The company has been working on building its own AI model, LLAMA, and Deepseek’s breakthrough shows possible efficiencies available to future LLMs.
The companies that are hit hardest on Monday, including Nvidia, make AI chips that power these models.
Last week, Deepseek released a competitive AI model with Openai last week, Put it at the top of the Apple App Store.
Venture capitalist Marc Andreessen wrote in an article on January 24 This latest R1 model from Deepseek is “one of the most amazing and impressive breakthroughs I have ever seen.” Apple also offers Chatgpt on its latest iPhone.
The reported cost to train one of its latest models was just $5.6 billion, well below Openai more than 100 million dollars In spending to train GPT-4 – sparking concern among the investment community that hyperscalers are seriously investing in AI infrastructure.
NVIDIA (NVDA) and Broadcom (AVGO) have chip stocks, while Nasdaq Tech Heavy was down 2.6%. Hyperscalers Microsoft (MSFT), Google (GOOG) and Amazon (AMZN) also fell.
Even with Apple Stock rising on Monday, shares are still down 12% from last month as AI smartphones and PCs struggle to gain traction.
The stock was hit by two downgrades last week from Jefferies and Loop Capital amid its struggling iPhone sales. Apple is expected to report earnings after Bell on January 30. The majority of analysts tracked by Yahoo Finance recommend buying the stock and seeing shares rise to $246 over the next 12 months.
Laura Bratton is a Yahoo Finance reporter. Follow her at bluesky @ laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
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