The stunning success of Chinese AI startup DeepSeek triggered a bloodbath for tech stocks on Monday as Wall Street reacted to fears the newcomer could challenge U.S. leaders in the field. After a massive selloff, you may be tempted to cut your losses—or avoid this volatile sector altogether. Several analysts, however, urge calm and say now could even be the time to take advantage of the pullback to buy powerhouse companies poised for long-term success.
To be clear, a correction in a market full of frothy valuations was probably overdue. It’s not unreasonable for investors, the analysts said, to question whether the AI spending boom that has swept through Silicon Valley—Bloomberg Intelligence has said Big Tech capital expenditure could hit $200 billion in 2025—will generate adequate returns.
