DeepSeek Shakes Up AI Stocks, Nvidia Fires Back

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The week began with jitters across the tech sector. News about DeepSeek, a Chinese artificial intelligence company, sparked a broad selloff in AI-linked stocks, from chipmakers to software firms. The underlying fear was that cheaper, more efficient models developed in China could erode the competitive edge held by US AI giants.

Still, the initial hit did not translate into a prolonged rout. Several analysts and trade outlets noted that DeepSeek's emergence doesn't necessarily sink the so-called AI titans in the US, since these companies have infrastructure, capital and business relationships that can't be replaced overnight.

Nvidia and Palantir take center stage

Nvidia, one of the hardest-hit names early on, ended up posting its biggest weekly gain in more than a year, partly because the market read continued strong demand for its chips despite the DeepSeek noise. Palantir, meanwhile, had its best week since 2024, a notable turn for a company some investors had recently viewed as a laggard within the AI story.

The episode offers a lesson on how the AI market moves today: news about new competitors, especially from China, can trigger immediate, broad reactions, but the subsequent split between winners and losers tends to happen fast. Understanding that gap between the initial shock and what follows helps explain why these sharp moves don't always reflect a fundamental shift in the sector's outlook.