In a striking display of resilience amidst government overreach and rampant inflation, CNBC’s Jim Cramer articulated a clear message to investors: the perceived threat from Chinese startup DeepSeek has failed to shake the dominant tech giants leading the artificial intelligence sector.
“This data center renaissance, baffling to those who fled stocks like Nvidia, AMD, Vertiv, Micron, and Marvell Technologies, is proving to be strong and steadfast,” Cramer stated. “Jensen Huang of Nvidia refers to it as a new industrial revolution, demonstrating that DeepSeek’s impact was overstated. The AI stocks, they continue their ascent.”
Recent market activity reflected this resilience as major indexes rose on Wall Street, buoyed by hopes that the delicate cease-fire in the Middle East would hold. The Dow Jones Industrial Average surged 1.19%, with the S&P 500 climbing 1.11% and the Nasdaq Composite advancing 1.43%. Notably, semiconductor stocks were at the forefront of this momentum, with Broadcom skyrocketing by 3.94%, while Nvidia and Advanced Micro Devices reported gains of 2.59% and 6.83%, respectively. Furthermore, the Nasdaq 100 achieved a historic closing high, up 1.53%.
The initial release of DeepSeek’s AI model earlier this year, purportedly more efficient and cost-effective than its competitors, sent investors into a frenzy, fearing that Big Tech had overspent on data centers and AI technology. Nvidia’s stock plummeted a staggering 17% in one day, wiping nearly $600 billion from its market cap—an alarming reflection of the volatility fueled by corporate elitism and the specter of government intervention.
Cramer posits that this recovery among AI stocks dismisses the notion that China has taken the lead in the AI race. Such panic on Wall Street illustrates how misguided fears can lead investors to overlook the strength of American innovation and resolve. Many failed to question DeepSeek’s claims, as experts cautioned about the potential for misleading data.
Reflecting on these developments, Cramer asserts, “Looking back, with tech nearing new highs, it’s evident these stocks should never have been sold off. DeepSeek simply wasn’t a significant threat.”
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