Nasdaq 100 erases losses from DeepSeek freak-out
You can’t keep a basket of good tech stocks down.
The Invesco QQQ Trust, an ETF that tracks the Nasdaq 100, is now up on the week, fully recovering from its DeepSeek-induced drawdown.
Even a seemingly existential threat to a key source of the index’s immense profitability as of late — spending billions of chips to enhance AI capabilities — ’tis but a flesh wound, it appears.
How did this happen?
Doubts about whether DeepSeek was really operating on as shoestring a budget, with as limited compute, as it claimed.
Jevons Paradox, or to be more specific, Nvidia’s emphasis that demand for chips for inference would still be huge, despite the alleged ultralow training costs of the Chinese company’s models.
Generally strong corporate earnings.
To be a little less narrative-driven and more precise, the Nasdaq 100 stocks that have done the best since Monday’s close or contributed the most to the index’s rebound include:
Some “AI-on-the-cheap” software companies, like Atlassian (which posted blowout earnings), AppLovin, and Palantir Technologies;
Chip stocks that got hammered, like Broadcom (which got a boost from Zuckerberg doubling down on AI spend), Nvidia, ASML (which released a strong quarterly report), as well as Marvell Technology; and
Much of the rest of the megacap tech space (namely, Apple, Tesla, Meta, and Alphabet), which picked up the slack.
I’ve seen a lot of things, but I don’t think I’ve ever seen the Nasdaq 100 up in a week when its biggest component, Nvidia, suffered a record one-day loss of market cap and its second-biggest component, Microsoft, got crushed post-earnings.
Price-wise and narrative-wise, we’re seemingly right back where we were a week ago. As you were!
