AI sell-off underlines need for 'exposure across the value chain'
After a new artificial intelligence (AI) model from Chinese startup DeepSeek sparked a sell-off on Monday, Citi US equity strategist Drew Pettit joins Brad Smith and Seana Smith on Morning Brief to discuss how the new tech and the market reaction have impacted his investment thesis for AI players. Despite what he calls a "really aggressive" sell-off, Pettit says, "AI remains one of our top themes." He adds, "When we invest in new technologies, we want to have exposure across the value chain. What we saw yesterday wasn't a broad AI sell-off; it was AI enablers." Among those hardest hit by the sell-off were chipmakers like Nvidia (NVDA) — which lost $589 billion in its market cap from the event — and Broadcom (AVGO), as well as utility sector names like Vistra (VST) and Oklo (OKLO). "I think the picks and shovels [are what] sold off, [while] actually, that application layer hung in pretty well. And some of the companies that we view as potential early users of the technology [were] actually up," Pettit notes. The strategist tells investors, "When we think about new technology, let's diversify across that value chain, and that's how we manage volatility like we had yesterday." 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.
