Flag of USA and China on a processor, CPU or GPU microchip on a motherboard. US companies have become the latest collateral damage in US - China tech war. US limits, restricts AI chips sales to China.

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China’s DeepSeek turns AI on its head, with US tech stocks on track to lose $1 trillion in value

Nvidia could shed more than $350 billion today, as DeepSeek outscores OpenAI models on some measures.

1/27/25 8:43AM

Despite only being founded in 2023 and reportedly using inferior chips at a fraction of the cost of many of its competitors, Chinese AI lab DeepSeek released the R1 last week — a model that goes toe to toe with some of the biggest names in AI.

Its hardware efficiency, coupled with the fact that it’s free to use and open-source, is a potent cocktail that’s spooked the technology world over the weekend. DeepSeek’s output challenges the “spend billions to accelerate AI progress” narrative, and is sending stocks like Nvidia, Broadcom, and Microsoft plummeting in premarket trading — threatening to wipe as much as $1 trillion off America’s top tech names.

DeepTrouble

Indeed, the weekend buzz around the large language model — the fact that it “thinks” before it speaks, shows its workings, and matches OpenAI’s most powerful model, the o1, on a range of metrics — seems to have left much of Silicon Valley wowed and worried, in almost equal measure.

Per DeepSeek’s own figures, the R1 model outperforms the OpenAI o1 on a variety of key tests, shining particularly brightly in math, where it beats the latest model from Sam Altman’s company on three different tests. While it’s less consistent on coding and language tests — it fared particularly badly on the “SimpleQA” (not shown in chart above), a test evaluating the simple factual accuracy of the info that LLMs spit out — the differences are fairly slim, making the cost-effective R1 look impressive.

The Chinese company’s slimmed-down training costs, use of cheaper chips, API, and open-source model have hauled the endless drive for more chips and compute that’s driven much of the market for the last 18 months into question. Meta, for example, is planning to spend more than $60 billion on capital expenditures just this year.

At a time when people are wondering if we can trust TikTok due to Chinese government ties, many have similar questions about DeepSeek. Tech evangelist Marc Andreessen was among those singing R1’s praises over the last few days — though he may not have asked it about Tiananmen Square yet.

Nate Becker10h

GameStop pops as Q1 revenue, profit rise and retailer authorizes $2 billion of stock buybacks

GameStop shares popped after hours, as the company authorized a $2 billion stock buyback and posted a blockbuster fiscal first-quarter profit aided by unrealized gains on its options exposure to eBay stock.

Here are the numbers from the retail-trader favorite:

Adjusted EPS of $0.30, up from $0.17 a year earlier and above the $0.16 estimate of… precisely one analyst.
Revenue of $835.3 million, up 14% from a year earlier.
A $2 billion stock-buyback authorization, which is equivalent to about one-fifth of the company’s market cap.
A whopping $268 million unrealized gain because of its options exposure to eBay stock that it bought as it attempted to buy the online retailer. That led to a record quarterly net income of $389.6 million.
The highest first-quarter operating income ever, at $143.3 million – a number not aided by the gain in eBay stock, but rather by higher revenue and improved margins.

Shares rose 7.1% after hours.

The buyback authorization is a particularly interesting development for GameStop, which less than two years ago issued billions of dollars worth of shares as it took advantage of surging stock prices.

Of course, it’s worth noting that the buyback authorization can be used piecemeal fashion for the next three years, so any potential buybacks don’t have to happen anytime soon — or at all.

Jon Keegan16h

GitLab shares soar on earnings and revenue beat

Shares of GitLab soared over 8% in after-hours trading after the company’s quarterly results beat analyst expectations for earnings and revenue.

For FY2027 Q1, the code development and security platform posted:

Revenues of $264.2 million (estimate: $254 million).
Adjusted earnings per share of $0.23 (estimate: $0.21).

In a press release, GitLab CEO Bill Staples wrote, “The agentic era is creating structural tailwinds for GitLab, and Q1 showed it clearly with accelerating platform activity and promising traction from GitLab Duo Agent Platform.”

As AI eats the software development world, platforms for human coders like GitLab are facing some existential threats. Last month, GitLab shares dropped after it announced a restructuring plan, slashing its country footprint by 30%, and today it confirmed that 350 team members would be cut. The company said it expects the restructing to be complete by the end of FY 2027.

Shares of GitLab were down about 15% year to date heading into the report.

Paige Oamek16h

Nuclear stocks gain as federal officials approve plan to restart Three Mile Island

US officials have given Constellation Energy the green light to turn the Three Mile Island nuclear power plant back on.

On Monday night, the Federal Energy Regulatory Commission filed a waiver allowing the company to transfer grid rights from a gas-fired power plant outside Philadelphia to Three Mile Island. The company says that due to the waiver, it aims to restart the nuclear power facility by 2027 in order to supply Microsoft data centers with energy.

Additionally, other nuclear stocks like Oklo, GE Vernova, Energy Fuels, and Cameco Corp. traded higher Tuesday afternoon.

This comes after last week’s Energy Department announcement that it would provide weapons-grade plutonium to five energy startups, including Oklo, to be processed into fuel to generate electricity.

Companies have said these weapons stockpiles are a way to get nuclear reactors fueled quickly as the industry scales.

Tasha Matsumoto

16h

S&P 500 closes at record high for sixth consecutive session

Stocks continued their longest win streak in over a year while oil prices ticked up.

Cowboy Riding a Bull - stock illustration

Helena Cheng22h

Victoria’s Secret jumps after posting surging sales and raising full-year outlook

Victoria’s Secret shares are up more than 40% in early trading after the apparel retailer delivered a strong Q1 earnings beat and substantially lifted its full-year guidance. It was a welcome win for the company as it officially changed its stock ticker symbol to VSXY from VSCO on the New York Stock Exchange.

Key numbers:

Adjusted earnings per share of $0.60 (compared to analyst estimates of $0.30).
Net sales of $1.56 billion, a 15% year-over-year increase (estimate: $1.52 billion).
Adjusted operating income of $80 million (estimate: $42 million).

Comparable sales rose 13% during the quarter, beating the estimated 12%. The company said double-digit growth was recorded across its Victoria’s Secret, PINK, and Beauty brands, as well as across stores and direct and international channels.

Buoyed by the strong momentum, management raised the retailer’s full-year guidance. Victoria’s Secret now projects full-year net sales to reach between $7.03 billion and $7.13 billion, up from a previous cap of $6.95 billion. Adjusted operating income is now anticipated to land between $550 million and $580 million, a jump from the previously projected range of $430 million to $460 million.

“Our customer responded strongly to our product innovation, emotionally resonant storytelling, and distinct brand projection, driving double-digit growth in new customer acquisition, increased regular-price selling, and broad-based strength across categories, channels, and geographies,” CEO Hillary Super said in a statement. “These results reflect the progress we are making against our Path to Potential strategy as we continue to strengthen customer connection, build brand heat, and drive sustainable long-term growth.”

The company’s “Path to Potential” transformation strategy was launched to right-track the business after a multiyear stretch of declining sales and cultural scrutiny. The changed ticker also signals a fresh corporate chapter under Super, who is steering the retailer through a major brand turnaround.