But James Demmert, CIO at Main Street Research, with $2.5 billion in AUM, thinks the Jan. 27 sell-off was an overreaction to DeepSeek, as well as a “needed overdue correction” in the markets.
“Given the Fed (Federal Reserve) meeting this week, which may have a hawkish tone, we think that this correction may have further to run but will create a great window of opportunity to be a buyer of tech, telecom and the market as a whole,” he added.
Demmert also does not view DeepSeek as presenting a threat to companies like NVIDIA. “Though these disruptions may cause leadership changes in the technology that drives AI, it is confirmation that AI is real and that we are in the early stages of this transformative technology, which will benefit tech and telecom companies, (and) other industries such as healthcare,” he said.
Main Street Research's Demmert doesn’t think so.
“We do not think that DeepSeek and its potential success is enough to bring investors back to China just yet,” he said. “Moreover, we think it is highly likely that within days the Trump administration will bring warnings which will include the risk of DeepSeek gathering personal information, as well as questions around the reality of DeepSeek’s power. China's economy is troubled and needs broad solutions beyond DeepSeek to attract investors.”
Read the full article here.
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