The emergence of a potentially cheaper and more efficient AI model from China, DeepSeek, triggered a sell-off in tech stocks, with Nvidia, Broadcom, Micron, and Arm Holdings experiencing significant declines. Analysts are closely monitoring price charts for support levels and potential breakouts.
As Nvidia and tech shares experienced a sharp decline due to the emergence of a potentially cheaper and more efficient artificial intelligence model originating from China , technical analysts were closely examining price charts to identify crucial support levels and potential breakouts that could signal further selling.
For Nvidia, the leading manufacturer of processors that drive AI, the downside floor might be reset to roughly between $115 and $120, according to Wolfe Research macro strategist Rob Ginsberg. This represents a significant drop from the $130 level observed over the past three months. Ginsberg is also monitoring the price of the Technology Select Sector SPDR Fund (XLK), anticipating that buying activity will intensify between the stock's recent low of $224 and approximately $230.Ginsberg's assessment follows a turbulent Monday in the tech sector, fueled by a sell-off linked to DeepSeek, a China-based AI laboratory. Nvidia shares plunged nearly 13%, Broadcom tumbled 14%, while Micron Technology and Arm Holdings retreated 9% each. DeepSeek's open-source large language model recently achieved performance benchmarks that surpassed OpenAI's ChatGPT, which DeepSeek claimed cost less than $6 million. In contrast, Western companies, including Meta Platforms, Microsoft, and Alphabet's Google, have invested billions in acquiring chips and constructing data centers to develop comparable models. The sell-off casts a wider shadow on the AI competition between China and the U.S., raising concerns that the technological gap between the world's two largest economies is narrowing
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