DeepSeek revelation sparks debate on US AI leadership, creates opportunities for software companies.
Software companies may emerge as winners following the recent turmoil in the global tech sector sparked by the DeepSeek revelation, according to Wall Street analysts. While many tech stocks plummeted on Monday, Chinese startup DeepSeek raised concerns about U.S. leadership and spending in the field of artificial intelligence, causing investors to reassess the future of the industry.
However, analysts at BMO Capital Markets and Canaccord Genuity believe the DeepSeek news could actually be beneficial for the software sector. Canaccord Genuity's Kingsley Crane described Monday as a 'watershed moment' for software, highlighting the emergence of a viable alternative to building the largest AI models. Crane argued that this increased diversity and competition within the AI model space will drive down costs and lead to technological advancements, ultimately accelerating software development. He suggests that this shift toward more innovative and cost-effective AI solutions is a 'recipe' for success in the software industry. BMO analyst Keith Bachman echoed this sentiment, predicting that the DeepSeek developments should have a 'likely positive' impact on software companies like Salesforce, ServiceNow, and HubSpot. HubSpot has seen the most significant gains this week, surging over 6% since Monday, pushing its year-to-date increase to about 12%. Salesforce has also seen a boost, with its stock price climbing nearly 6% this week, bringing its year-to-date advance to over 5%. Both companies have garnered buy ratings from most analysts. ServiceNow, while experiencing a more modest 3% increase this week, has still managed to achieve a near 9% rise in 2025, building upon last year's surge of over 50%. The majority of analysts continue to hold buy ratings for ServiceNow, but anticipate a slight pullback in the near future. It's important to note that not all software companies are expected to benefit equally from these developments. Bachman suggests that the impact on hyperscalers like Microsoft and Oracle remains less clear. Overall, however, the DeepSeek revelation appears to have triggered a positive shift in investor sentiment towards the software sector, with many analysts predicting continued growth and innovation in the coming months.
SOFTWARE AI DEEPSEEK TECH STOCKS INVESTMENT COMPETITION INNOVATION
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Stock market today: Asian stocks gain after Wall Street opens 2025 with modest lossesAsian markets have opened with gains after U.S. stock indexes slipped as Wall Street’s weak end to last year carried into 2025.
Read more »
Stock market today: Asian stocks gain after Wall Street opens 2025 with modest lossesAsian markets rose on Friday after U.S. stock indexes slipped as Wall Street’s weak end to last year carried into 2025. U.S. futures and oil prices rose.
Read more »
Dividend Stocks Gain Traction Amid Market UncertaintyMajor U.S. indices performed well in 2024, boosted by artificial intelligence excitement and interest rate cuts. However, 2025 may bring macro uncertainty, prompting investors to seek stable income. The article highlights ARCC, a specialty finance provider with a quarterly dividend of 48 cents per share and an 8.7% yield, as a preferred investment for 2025. RBC analysts reiterate a buy rating on ARCC, citing its strong market position, origination engine, and risk management capabilities.
Read more »
Dividend Stocks Gain Traction as Market Uncertainty LoomsMajor U.S. indices enjoyed a strong performance in 2024 fueled by artificial intelligence excitement and interest rate cuts. However, investors are facing potential headwinds in 2025 due to macroeconomic uncertainty. This climate makes dividend stocks an attractive option for income seekers. The article highlights Ares Capital Corporation (ARCC) as a top pick, citing its 8.7% yield and RBC's positive outlook. It also mentions ConocoPhillips, an energy company increasing its dividend and share buybacks after strong third-quarter results.
Read more »
Jefferies favorite software stocks for 2025 and how to play themJefferies favorite software stocks for 2025 and how to play them
Read more »
2025 outlook for the security, design, and vertical specific software stocks: Barclays2025 outlook for the security, design, and vertical specific software stocks: Barclays
Read more »