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!