Does China's DeepSeek derail Big Tech earnings? Not exactly.
Chinese artificial intelligence startup DeepSeek's new AI model sparks worries about global AI competition, sending US stocks (^DJI,^GSPC, ^IXIC) sharply lower on Monday. Chipmakers Nvidia (NVDA) and Marvell Technology (MRVL) and energy provider Oklo (OKLO) are among the AI-related stocks tumbling on the news, just ahead of the first round of Big Tech earnings this week.. Principal Asset Management chief global strategist Seema Shah joins Morning Brief with Seana Smith and Brad Smith to discuss how the sell-off could impact investor strategies heading into Big Tech earnings season. There are "a lot of questions that need to be answered before investors can really make an educated decision on how they want to deal with their exposures. Right now, I don't think that we're at that point where we can start talking about correction territory," Shah says. "This is a good reminder that global diversification really is key." "I think the macro environment at the moment is constructive, which means that there should anyway be a broadening out away from some of those mega-cap tech names to other sectors. So, it's important right now that investors be looking at what is the broad universe of opportunities, not just in those [Magnificent Seven]," made up of Nvidia, Alphabet (GOOG, GOOGL), Tesla (TSLA), Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META), and Apple (AAPL). The strategist adds that investors have become more concerned about market concentration, finding "that a lot of the trade has become very much one-sided." "If DeepSeek is everything that they're saying, this is ultimately positive for broad productivity around the world for all sectors ... Maybe it does put some question marks around those very key tech names... for the US, but it certainly isn't necessarily the end of the story of the US exceptionalism and productivity." To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. This post was written by Naomi Buchanan.
