Following a significant sell-off on Monday, stocks involved in AI infrastructure, such as Micron, Credo, and Vertiv, have seen notable rebounds. This sell-off was triggered by panic surrounding DeepSeek's new AI model announcements, particularly due to fears of losing technological superiority and potential export control ramifications. However, as investor sentiment stabilizes and reassurances from major companies like Microsoft and Meta come to light, these stocks have regained their footing, highlighting the volatility and rapid shifts in perception within the AI sector.
Following the initial panic over DeepSeek's innovations, AI infrastructure stocks like Micron and Credo are experiencing a pronounced rebound as investor fears lessen.
The sell-off was driven by fears of losing the AI lead to DeepSeek, a Chinese company, and concerns over export controls impacting demand for NVIDIA products.
DeepSeek's announcements, especially regarding model efficiency, were blown out of proportion by media narratives, leading to a significant but misplaced market reaction.
The panic demonstrated how quickly sentiment can shift in volatile stock sectors like AI, influenced by social media and speculation rather than fundamentals.
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