As Microsoft prepares to report its second-quarter earnings for fiscal 2025, the tech landscape is buzzing with concerns triggered by DeepSeek's unveiling of its cost-effective AI model. Analysts predict earnings of $3.11 per share amidst significant AI investments. The landscape has shifted following DeepSeek's claims, leading to drastic shifts in market valuations of established companies like Nvidia. The rise of AI investments, which soared to over $200 billion last year, now faces scrutiny as uncertainty about returns arises. This backdrop complicates the evaluation of Microsoft and its peers' heavy financial commitments in AI.
DeepSeek's recent AI cost claims have sent ripples through the US stock market, questioning the multibillion-dollar investments tech giants have made in AI.
Despite deep investments in AI, Microsoft's upcoming earnings will reveal if these expenditures are translating into substantial returns amidst recent market volatility.
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