Weekly Market Recap: AI Selloff, Earnings, and DeepSeek’s Breakthrough
The past week was packed with AI developments, market selloffs, and key earnings reports, shaping the outlook for investors.
DeepSeek’s AI Breakthrough
DeepSeek-V2, a new open-weight AI model from China, made waves last week. The model reportedly rivals GPT-4 in certain benchmarks while being fully open-source, signaling potential shifts in the AI ecosystem.
With China’s AI race heating up, this development raises questions about open-source AI competitiveness, regulatory scrutiny, and how leading U.S. AI companies may respond.
AI Infrastructure Selloff
Chips, data centers, power, and networking stocks tumbled as investors questioned whether hyperscalers will sustain their massive capital investments.
Stocks like Nvidia (NVDA), Supermicro (SMCI), and Arista Networks (ANET) faced heavy selling on concerns about a slowdown in spending.
However, as we pointed out midweek in this post, AI’s Next Phase: What Meta and Microsoft’s CEOs Are Saying About DeepSeek, Meta (META) and Microsoft (MSFT) reaffirmed their AI spending plans, suggesting capital deployment will continue, even if more efficiently allocated.
Earnings Spotlight
Microsoft (MSFT) – AI-driven cloud growth remained strong, but cautious management commentary tempered excitement.
Apple (AAPL) – Strong overall results, but weak iPhone demand in China raised concerns.
Meta (META) – Blockbuster earnings; ad revenue surged, but AI and metaverse spending weighed on the outlook.
Tesla (TSLA) – Missed expectations with weak margins and demand concerns, sending shares lower.
Other notable earnings: IBM, Starbucks (SBUX), AbbVie (ABBV), Exxon Mobil (XOM), Visa (V), and Mastercard (MA), reflecting trends across tech, consumer spending, healthcare, and energy.
Macro Headwinds Loom
The market is adjusting to shifting Fed rate expectations, fresh U.S. tariffs on Canada, Mexico, and China, and global economic data that signal a more complex Q1 outlook.
With another packed week ahead — including fresh earnings reports and geopolitical shifts like new U.S. tariffs — investors will need to stay nimble. More in tomorrow’s market preview.