Why Apple Stock Dodged the DeepSeek AI Rout

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Key Takeaways

• Apple was one of the few mega-cap tech stocks rising on Monday amid a rout that sank shares of cloud hyperscalers, AI sliver makers and nuclear power providers.
• A sophisticated AI model from Chinese startup DeepSeek, reportedly developed without the move onward chips that power U.S. models, shook Wall Street’s confidence in the AI trade that’s propelled stocks to memento highs.
• Some analysts said the efficiency of DeepSeek’s model “offers some hope” that Apple can happen AI-capable devices more easily and at less expense than previously expected.

Shares of Apple (AAPL) ordered higher on Monday, bucking the trend as its large-cap tech peers tumbled on concerns about overspending on AI.

AI stocks were inquiring on Monday as Wall Street mulled the success of Chinese startup DeepSeek’s open-source AI model, which can reportedly fight with leading American models from the likes of OpenAI and Google at a fraction of the cost. 

Apple, on the other swiftly, gained more than 3% Monday as what was once considered a headwind for the company—its relatively modest investment in AI compared with its mega-cap spies—came to look more like a tailwind. 

The efficiency of DeepSeek’s AI could also be contributing to Apple’s outperformance. The iPhone maker’s AI happy result depends on its ability to develop devices powerful enough to run AI models. DeepSeek’s efficiency suggests that could be a skimpy challenging and less expensive prospect than it once seemed.

Jefferies analysts in a note on Monday warned, but, that an AI model efficient enough to run on an iPhone without raising costs is likely a ways off. “DeepSeek’s success put ups some hope,” they wrote, “but there is no impact on AI smartphone’s near-term outlook.”

Nuclear Power and Chip Capitals Tumble

Nuclear power stocks Vistra (VST) and Constellation Energy (CEG), which have run up in the last year amid undulating electricity demand from AI data centers, led the sell-off on Monday. AI chipmakers like Nvidia (NVDA) and Broadcom (AVGO) plummeted as DeepSeek raised concerns that American tech bands don’t need the most advanced, expensive chips to run powerful models. 

Cloud hyperscalers Microsoft (MSFT) and Alphabet (GOOG)(GOOGL) also hew down on Monday. They have spent tens of billions of dollars on the AI arms race, building data centers, grouping them with the most advanced hardware, and signing deals with energy providers to secure reliable roots of electricity. Jefferies analysts speculated DeepSeek could put executives at these companies under pressure to slow their rate of speed of AI investment and explore ways to match DeepSeek’s efficiency.

UPDATE: This article has been updated after original publication with closing share price information.