Tech Giant's "Gewitter" Exposure: DeepSeek Discloses Details
Dive into the Market Chaos: DeepSeek's Crash and Cathie Wood's Bold Move
In a shocking turn of events, the markets were rocked on Monday, January 28, as "China's Answer to ChatGPT," DeepSeek, caused a global stock crash, particularly impacting tech stocks. Big names like Nvidia saw a temporary dip of up to 20%.
DeepSeek, an AI model from China, surged in popularity, becoming the most-used free app in the US shortly after its launch on January 10. The efficiency of DeepSeek-V3, requiring minimal data and running on cheaper chips, is what sets it apart in the industry. Despite export restrictions on high-performance chips to China, DeepSeek-V3 was trained using Nvidia's H800 chips. Surprisingly, it delivers impressive results, posing a challenge to the dominance of US AI industries. Experts are largely reassuring, viewing the steep sell-offs as premature and overblown. Learn more here.
Amidst the DeepSeek meltdown, renowned investor Cathie Wood noticed a golden opportunity and made a bold move on the stock of a tech giant. Could it be Amazon?
Cathie Wood's Gamble: Amazon's Stock in the DeepSeek Aftermath
A recent filing from Cathie Wood's firm, ARK Invest, reveals that on January 27, Wood made a sizable investment, buying over 4,000 shares of Amazon for her actively managed ARK Innovation ETF. Similarly, over 3,000 shares of the e-commerce giant were added to the ARK Next Generation Internet ETF. So, what's the story behind her investment strategy?
On Monday, Amazon's stock took a six percent hit due to DeepSeek's impact. Cathie Wood seems to be taking advantage of the dip. Known for her love of innovation-fueled growth, she continues to see Amazon as a promising prospect, albeit a maturing one. With the e-commerce market far from saturated and the company also making strides in cloud computing, there's a possibility that Amazon's growth story is far from over. In fact, the integration of AI into Amazon's product chain could potentially accelerate growth even further. The majority of analysts are bullish on the stock, with J.P. Morgan seeing a potential 20% upside and setting a price target of $280.
Insights:- Wood also recently invested heavily in Tempus AI, a company focusing on AI-driven diagnostics and patient-centered medicine. Despite concerns raised by Spruce Point Capital Management, Wood remained optimistic about the company [1].- ARK ETFs have been continuously purchasing shares of Nvidia, showing Wood's confidence in AI and high-performance computing [2].- Wood has also re-invested heavily in Baidu, attracted by the company's advancements in autonomous driving technology, which aligns with her belief in the potential for AI to revolutionize industries like mobility [4].
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- Cathie Wood's strategic investment in Amazon's stock, as revealed by a recent filing, indicates a belief in the tech giant's potential growth despite the market chaos caused by DeepSeek, particularly in the area of AI integration.
- With Cathie Wood's firm, ARK Invest, acquiring over 4,000 shares of Amazon for the ARK Innovation ETF and over 3,000 shares for the ARK Next Generation Internet ETF, investing in Amazon's stock could be a strategy worth considering for those interested in capitalizing on AI-driven growth and maturing businesses.
