AI Stock Market Faces Uncertainty Amid DeepSeek’s Emergence

NEW YORK, NY – The rise of artificial intelligence stocks is facing scrutiny as the Chinese startup DeepSeek emerges with a competing AI model. Analysts question whether the current AI stock market boom will sustain itself or falter.

Top AI stocks, including Nvidia and Microsoft, have been under pressure as expectations remain high. Many companies, such as Amazon, Google parent Alphabet, and Meta Platforms, are evaluating both risks and opportunities stemming from the escalating generative AI trend.

DeepSeek, making headlines for its efficient AI training model that requires substantially less computing power, has raised concerns among existing leaders in the AI space. “The introduction of DeepSeek has renewed discussions on the bear case for AI semiconductors,” said Bank of America analyst Ohsung Kwon, who estimates that hyperscalers will increase capital spending on AI by $34 billion, or 13%, in 2025.

On the earnings front, Nvidia is scheduled to report on February 26, while Arista Networks will release its earnings on February 18. Nvidia’s struggle to ramp up production for its next-generation Blackwell AI chips has led to a 3% decline in its stock prices so far in 2025.

As competition intensifies, Meta has seen significant growth in its AI offerings, claiming over 700 million monthly users of its AI assistant and anticipating reaching 1 billion in 2025. Meta has also hired Clara Shih from Salesforce to lead its new “Business AI” division.

Despite a mixed performance, some stocks are performing favorably. Amazon’s shares are up 4%, while Meta has jumped 22%. In contrast, Alphabet’s stock is down 2%, and Microsoft has fallen nearly 3% as concerns over capital spending linger amid emerging competition.

Palantir Technologies, which focuses on data analytics, is also worth noting. It has significantly outperformed other chipmakers and data center stocks, gaining 46% in 2025.

The ongoing battle in AI is underscored by the global race to develop Artificial General Intelligence. An increase in corporate spending on AI projects has been prompted, albeit cautiously, by the burgeoning market for generative AI technologies capable of creating its text, images, and videos.

“We expect the narrative around AI to shift from telling to demonstrating its value, which places additional pressure on companies to align investments with actual revenue generation,” Kwon added.

Super Micro Computer, which recently held its earnings call, is a notable example of a company striving to maintain momentum. Its projections indicated a 54% year-over-year revenue increase with AI-related platforms contributing more than 70% to its revenue in Q2.

Despite facing challenges, such as cash flow issues and reduced revenue guidance, Super Micro projects future growth in its AI offerings and plans to ramp up production capabilities with new facilities in Malaysia, which could enhance its competitiveness.

However, the company’s stock remains volatile, trading lower than its all-time highs, signaling investor concerns amid regulatory compliance challenges and the marketplace’s rapidly evolving landscape.

Investors and analysts will be closely watching the AI sector’s performance as trends continue to form and companies navigate the dual pressures of competition and technological advancement that mark this pivotal moment in the market.