MW Nvidia, Caterpillar and other winners and losers from DeepSeek's emergence, according to JPMorgan

By Steve Goldstein

Nvidia - whose market capitalization dropped by $600 billion in a single day on the emergence of the Chinese AI chatbot DeepSeek - is actually going to be a beneficiary of the new service, according to a new report from JPMorgan.

The investment bank consulted analysts across a number of industries to assess the impact of the new large language model.

On Nvidia $(NVDA)$, the firm argued that higher compute complexity and new innovation in models combined with the proliferation of applications should unlock strong demands for the chips the company produces. They say DeepSeek also will benefit chipmakers Broadcom $(AVGO)$, Marvell Technology $(MRVL)$ and Micron Technology $(MU)$, while it will hurt Intel $(INTC)$, due to the negative impact on server CPU demand.

The firm also expects a boost to the megacap technology giants Meta Platforms $(META)$, Amazon $(AMZN)$ and Alphabet $(GOOGL)$. "We believe the broader Internet ecosystem should benefit from model advancements and improved cost efficiency. Lower costs should accelerate GenAI development and adoption, resulting in increased consumption," they said.

Oracle $(ORCL)$, however, may be hurt as the emergence of DeepSeek increases the likelihood of overbuilding on overly aggressive data-center plans.

As hyperscalers reaffirm capital spending plans, the power companies should benefit, the analysts added.

JPMorgan even pointed out healthcare technology companies could benefit if DeepSeek leads to a quicker pace of AI adoption.

Caterpillar $(CAT)$, Cummins $(CMI)$ and Custom Truck One Source $(CTOS)$ by contrast could be hurt if power generation and facility build-out gets delayed or scaled back.

-Steve Goldstein

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February 05, 2025 06:00 ET (11:00 GMT)

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