ASML Holding NV, a leading semiconductor equipment manufacturer, saw its stock soar by 5.22% in the past 24 hours during Wednesday's trading session. This surge came amid renewed optimism surrounding the semiconductor capital equipment sector and potential tailwinds from the rapidly growing artificial intelligence (AI) industry.
According to a report from BofA Securities analyst Vivek Arya, the fallout from DeepSeek's possible breakthrough in AI has created a complex landscape for semiconductor players. While there are concerns about lower AI-related spending if DeepSeek's R1 translates to reduced compute demand for large language models (LLMs), the analyst also highlighted positive catalysts.
Notably, Arya pointed out that if DeepSeek's technology enables more economical inference at the edge, it could drive a device upgrade cycle for PCs and smartphones, supporting demand for leading-edge wafer fab equipment (WFE) like ASML's offerings. Additionally, Taiwan Semiconductor Manufacturing Co's (TSM) strong capital expenditure plans and Intel's intact capex projections bode well for the sector.
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