Tech stocks were mixed Tuesday afternoon, with the Technology Select Sector SPDR Fund (XLK) rising 2.3% and the SPDR S&P Semiconductor ETF (XSD) down 0.5%.
The Philadelphia Semiconductor index rose 0.5%.
In sector news, the current frenzy around DeepSeek will prove to be "tech AI head fake" that will be short-lived as more details about its model and resources emerge, Wedbush Securities said in a note Tuesday. Analysts, including Daniel Ives, said that the claim that this model was built for $6 million without using Nvidia's (NVDA) next generation hardware is likely exaggerated, and it's at the center of the debate that sparked Monday's tech selloff.
In corporate news, Microsoft (MSFT) is considering an acquisition of TikTok, President Donald Trump said Monday, according to media reports. Separately, Microsoft-backed OpenAI unveiled ChatGPT Gov, which it said is designed to provide US government agencies with an extra way to access OpenAI's frontier models. Microsoft shares rose 2.6%.
Nvidia (NVDA) shares saw record retail purchases of $562.2 million following a 17% drop in stock price on Monday, fueled by concerns about DeepSeek's low-cost AI model, Reuters reported, citing Vanda Research data. Nvidia shares jumped 6.6%.
SAP (SAP) reported Q4 non-IFRS earnings from continuing operations on Tuesday of 1.40 euros ($1.46) per share, up from 1.12 euros a year earlier and above the FactSet consensus analyst estimate of 1.34 euros. Its shares were down 0.5%.
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