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US tech stocks weren't the only big losers from the DeepSeek-fueled rout on Monday.
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Utility and energy firms that have gained on the promise of an AI boom also plunged.
The DeepSeek wipeout did more than topple mega-cap tech stocks during Monday's sell-off — many of the under-the-radar winners of the artificial intelligence boom in the past year also plunged.
Panic consumed US investors after the Chinese startup DeepSeek introduced an AI tool said to be cheaper and more powerful and trained on less advanced chip technology. The chatbot challenged the idea that AI initiatives require massive investment and energy, casting doubt on a narrative that has helped drive stellar gains for US stocks in the past two years.
When the dust settled, Nvidia had lost $589 billion in market cap, and more than $1 trillion in value had been erased from markets.
But the damage spread beyond the most popular tech stocks.
Before investors started questioning the need for massive capital expenditures to fund AI, the hundreds of billions of dollars spent by US hyperscalers sparked an investing renaissance in a separate corner of the market.
When it became clear that the new technology would require vast energy resources and new infrastructure, stocks in those corners of the market rallied.
A construction boom in AI data centers pushed utilities to become the third-best-performing sector of the S&P 500 in the first half of 2024, even though the sector typically suffers when growth stocks soar.
But many energy, infrastructure, and real-estate stocks, which investors had hoped were less crowded bets than stalwarts like Nvidia, were caught in Monday's sell-off.
Shares of the Global X Data Center & Digital Infrastructure ETF tumbled by about 3% and were down by another 1% on Tuesday afternoon. Shares of the fund, which is backed by investments in data centers and other hardware infrastructure, gained 16% in 2024.
Digital Realty Trust stock was down by about 13% since Friday's close. It's the only data-center real-estate investment trust trading on the New York Stock Exchange.
Shares of Super Micro Computer, which counts Nvidia among its customers, slumped by more than 18% from Friday's closing price. The stock soared by triple digits in 2024 on investor bullishness around its business of supplying cooling technology for power-hungry GPU racks.
The biggest losers away from tech were in nuclear energy. Nuclear-power firms had positioned themselves as key sources of energy crucial to keeping the AI boom going and reducing the strain on other sources.