DeepSeek Impact on Microsoft and Nvidia Stocks: A New Investing Perspective
DeepSeek’s Market Disruption
The stock market is reacting to the significant sell-off in technology equities prompted by DeepSeek, a low-cost AI model from China. As investors reassess their positions, Microsoft (NASDAQ: MSFT) managed to limit its losses, unlike Nvidia (NASDAQ: NVDA), which faced a steep decline. Analysts are now updating their stock price targets for both tech giants amid changing market dynamics.
Recent Stock Performance
- Microsoft closed at $434.56, down over 2% but showed resilience with an uptick in pre-market trading.
- Nvidia plunged 16%, closing at $118.58, although it too has seen pre-market strength.
Analyst Review and Market Sentiment
UBS maintains a 'Buy' rating for Microsoft with a price target of $525, suggesting that strategic decisions under CEO Satya Nadella's guidance have positioned the company favorably in rolling out AI technologies. As noted by analyst Karl Kierstead, the small impact of -2% on Microsoft is a testament to its robust strategies in the AI sector, which subsequently validates the firm's operational stance.
Future Outlook for Microsoft
- Microsoft’s Stargate Project showcases a significant $500 billion investment in AI, which is expected to drive growth.
- Projected revenues of $68.8 billion for Q4 2024 and a potential revenue boost in Q1 2025 could enhance stock performance.
With Wall Street's prevailing bullish sentiment, a positive earnings report could alleviate further sell-off concerns stemming from DeepSeek's introduction.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.