Shares of Apple (AAPL) surged on Monday, standing out as a rare gainer among its tech counterparts, who faced declines due to unease over excessive AI spending. For further details, visit the original article on Investopedia. Apple was among the S&P 500’s top performers, rising nearly 4% by Monday afternoon. This contrary trend is attributed to Apple’s conservative AI investment strategy, which is now viewed as advantageous.

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The tech market was shaken by the emergence of DeepSeeks, a Chinese startup claiming its open-source AI model can rival leading American models, such as those from OpenAI and Google, at a significantly lower cost. As a result, major AI-driven stocks experienced notable falls. Nuclear power stocks like Vistra (VST) and Constellation Energy (CEG), as well as AI chipmakers Nvidia (NVDA) and Broadcom (AVGO), led the sell-off due to fears that cost-efficient AI models like DeepSeek might reduce the need for expensive, advanced chips.

The impact also extended to cloud giants Microsoft (MSFT), Alphabet (GOOG, GOOGL), and Amazon (AMZN), which have heavily invested in AI infrastructure. These companies face increasing pressure to reconsider their high-spending AI strategies and potentially emulate DeepSeek’s efficiency, according to Jefferies analysts.

Despite DeepSeek’s promising efficiency, Jefferies analysts highlighted that achieving an AI model capable of operating efficiently on an iPhone without escalating costs remains a distant goal. ‘DeepSeeks’success offers some hope,’ they noted, ‘but there is no immediate effect on the AI smartphones market outlook.’

Source: IndexBox Market Intelligence Platform