Qualcomm Inc. (QCOM) stock experienced a significant 24-hour plunge of 5.12% in pre-market trading on Monday. The semiconductor giant's share price decline is attributed to concerns raised by China's DeepSeek startup, which recently claimed to have developed a powerful artificial intelligence (AI) model at a fraction of the cost compared to major U.S. tech companies.
DeepSeek's apparent progress in building a highly competitive AI model using less-powerful chips has sparked worries among investors about the potential impact on the demand for expensive AI chips and hardware. Companies like Qualcomm and Nvidia, which produce high-end chips used in AI applications, could face reduced demand if DeepSeek's claims hold true.
The news has triggered a broader sell-off in semiconductor and AI-related stocks, with major players such as Nvidia, Broadcom, and TSMC experiencing notable declines. Investors are concerned about the implications of DeepSeek's claimed achievements for the entire AI chip and hardware industry, as it could potentially disrupt the market and impact the revenue and profitability of companies heavily invested in producing high-end AI chips.
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