Did DeepSeek take down American chip stocks?
U.S. chip stocks plummeted due to the rise of Chinese tech stocks, raising market concerns. Bank of America analysis pointed out that current U.S. chip stocks share similarities with telecom operators in the late 1990s, but the AI industry has advantages in profitability, technological differentiation, and capital allocation strategies. Despite facing competition and high valuation pressures, the AI industry is more likely to achieve long-term sustainable development
The continuous rise of Chinese technology stocks and the sharp decline of U.S. computing stocks on Friday have reignited market concerns about U.S. chip stocks.
Bank of America compared the current U.S. chip stocks with the similarities and differences of U.S. telecommunications operators (CLECs) in the late 1990s. It believes that despite the similarities, there are significant differences between the AI industry and the late 1990s CLECs. The AI industry has advantages in profitability, technological differentiation, and capital allocation strategies. Although the AI industry faces fierce market competition and high valuation pressure, it is more likely to achieve long-term sustainable development rather than decline like CLECs.
