Yesterday marked a significant day for Nvidia (NVDA) and the Philadelphia Semiconductor Index (SOX), experiencing their worst performance since March 2020 because of Chinese startup DeepSeek's super-efficient open-source AI model. However, this has led to some unexpected winners, with Salesforce (CRM) and Apple's (AAPL) stocks seeing a significant rise this week by 8% and 7% respectively.
It appears that DeepSeek's success is changing the perception of investors about the AI industry's foundational requirements, leading to a shift towards investing in companies that use AI rather than those that supply its essential tools such as semiconductors.
Experts predicted a surge in investor interest in AI agents at the end of last year, and now it seems to be happening. We're seeing the roll-out of AI agents from both established tech companies and startups, and every launch is met with eager anticipation from Wall Street. OpenAI and Salesforce have released their AI agents; Operator and Agentforce, respectively. Moreover, Tempus AI shares experienced a considerable uptick last week after launching Olivia, their AI healthcare assistant.
DeepSeek's cost-effective model is encouraging enterprises to allocate more budgets towards AI, reflective of a shift towards application from infrastructure. This trend is expected to drive the wider adoption of AI across various businesses and consumers and ultimately benefit major software companies with pre-established AI products like Microsoft, Salesforce, and Adobe.
"Morgan Stanley analysts agreed that enterprise software companies were most likely to benefit from the savings that should follow from America's DeepSeek reckoning". They anticipate Microsoft as one of the most likely beneficiaries because their Azure platform is a prime spot for application developers to access and build on foundational AI models.