Here Are the Stock Market Winners and Losers from the DeepSeek AI Upheaval

AI stocks were this past week when Wall Street took notice of a high-performance, shockingly efficient open-source AI model from Chinese start-up DeepSeek. 

The high-performance model, which DeepSeek said was trained in a matter of months for about $6 million, sparked concern that useful AI may not require the most powerful and most expensive hardware. It also threatened to undercut the investment thesis that has so far prevailed among U.S. tech companies: spend aggressively to build computing capacity and develop the most powerful models. 

A sell-off of semiconductor and computer networking stocks on Monday was followed by a modest rebound, but DeepSeek’s damage was still evident when markets closed Friday. Below, we look at some of the winners and losers of the reckoning of the past week. 

Nvidia

Nvidia (NVDA), the undisputed winner of the AI craze, was the undisputed loser of the DeepSeek panic. 

Shares tumbled 17% on Monday, their biggest one-day drop since March 2020 when it became evident Covid-19 would upend daily life around the world. The chip giant’s market cap, which stood at $3.6 trillion before last week, shrank by nearly $590 billion, the largest loss of market value for a single company on record. 

DeepSeek, some investors thought, could force U.S. tech giants to refocus their efforts on making more nimble, efficient AI models, and subsequently reduce their spending on Nvidia’s most sophisticated chips. Analysts were generally skeptical of that narrative. Bank of America analysts argued DeepSeek could be “AI’s Sputnik moment” that fuels even more AI investment beneficial to Nvidia. 

But some saw reason to be wary. Morgan Stanley analysts wrote that “the stock market reaction is probably more important than the cause,” and warned DeepSeek’s success could temper AI spending enthusiasm and compel the Trump administration to ratchet up semiconductor export controls. 

Nvidia stock, despite recovering some of Monday’s losses, finished the week 16% lower. 

Meta Platforms

Shares of Meta (META) climbed 6.4% last week, making it the best performer among the Magnificent Seven. 

The stock was bolstered by DeepSeek on Monday when it dodged the AI sell-off and rose about 2%. Investors felt vindicated by the success of DeepSeek’s model, which—like Meta’s large language model, Llama—is open-source. 

CEO Mark Zuckerberg, speaking during the company’s earnings call on Wednesday, said DeepSeek had “only strengthened our conviction this is the right thing for us to be focused on,” referring to open-source AI, as opposed to proprietary models.

Meta’s stock also got a boost from a strong quarterly earnings report. Meta easily surpassed Wall Street’s expectations on both the top and bottom lines, and executives in their comments to analysts possibly allayed some jitters about the DeepSeek threat.

ServiceNow

Shares of enterprise software company ServiceNow (NOW) finished their rollercoaster ride of a week about 1% lower.

The stock climbed 4% in the first two sessions of the week, boosted by optimism that DeepSeek’s cost-efficient model could hasten the development of more affordable AI models. Analysts and investors were quick to note software companies would immediately benefit from lower computing costs. More efficient AI could not only widen their margins, it could also enable them to develop and run more models for a wider variety of uses, driving greater consumer and commercial demand. 

ServiceNow shares were trading near a record high when the company on Wednesday reported disappointing quarterly results, leading its stock to plummet 11%. CEO Bill McDermott’s optimism about the company’s AI prospects couldn’t counter Wall Street’s disappointment that subscription revenue grew slower than expected and was forecast to grow even slower in the current quarter.