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(Bloomberg) — Two small technology stocks are surging Monday, bucking the broader market’s selloff, after announcing plans to use DeepSeek’s large language model in their businesses.
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Aurora Mobile Ltd ADRs soared a record 229% intraday Monday to the highest since November 2022 after the company said it has integrated DeepSeek’s R1 large language model in its artificial-intelligence platform. Shares of MicroCloud Hologram Inc. rose as much as 67% after the company similarly said that it would use the Chinese company’s technology as the basis for its holographic AI application. Both pared some of the jumps intraday.
The gains show how much DeepSeek’s roll out has altered — for one day, at least — traders’ perspective on the AI industry.
The company’s apparent ability to create a chatbot comparable to US models at a fraction of the price has reignited concerns about the sustainability of the massive investments companies like Meta Platforms Inc. and OpenAI have been plowing into semiconductors and other equipment to expand the technology.
Shares of Nvidia Corp., the biggest beneficiary of that spending, plunged as much as 13%, erasing a record $465 billion in market value, while the S&P 500 Index shed as much as 2.3%. The tech-heavy Nasdaq 100 Index fell as much as 3.6%.
The two that gained from their embrace of DeepSeek are small and have volatile stock-price histories. Aurora has market value of about $107 million, including today’s gains, while MicroCloud Hologram is only about $40 million.
Moreover, MicroCloud Hologram has previously caught the eye of the meme-stock crowd, leading to wild swings in shares. In February, the holographic technology company’s stock jumped 2,650% in a few days as posts about it surfaced on platforms like Reddit’s WallStreetBets and StockTwits.
Even after Monday’s gain, shares of MicroCloud and Aurora are well below their previous record highs.
—With assistance from Matthew Griffin.
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