Shocking the Global AI Market! DeepSeek's Low-Cost Model Sparks Huge Attention on Wall Street. How to Seize the New AI Wave? Here's the Complete List of Top Stocks in Popular AI Sectors (at the end of the article).

1. Low-Cost AI Model Ignites Global Market Enthusiasm

During the last two weeks, DeepSeek, a company under the High-Flyer Quant, launched its DeepSeek-R1 AI model, which quickly gained significant attention in the market. This breakthrough in low-cost technology marks a new stage for AI narratives. Within just 20 days of launch, daily active users exceeded 20 million, and DeepSeek has become the hot topic among investors worldwide.

The DeepSeek-R1 model has attracted global attention due to its impressive low-cost and high-performance advantages. Its training cost is only 1/30th of the latest OpenAI models, yet it excels in core areas such as mathematics and programming, even outperforming OpenAI’s GPT-01 on certain tasks. Since its release, DeepSeek has not only impacted U.S. tech stock prices but has also topped the global download charts on the Apple App Store and Google Play Store for several consecutive days.

The rapid global adoption of DeepSeek’s open-source AI model has accelerated the emergence of a "low-cost AI compute paradigm," which is expected to drive significant reductions in AI training and inference costs. Cathie Wood, CEO of ARK Invest, noted in an interview that DeepSeek’s rise intensifies competition in the AI sector, calling it a "positive development" that will help tech companies cut costs and enhance platforms.

DeepSeek’s success has fueled rallies across AI applications, software, and cloud services. U.S. AI application stocks rallied strongly, with Tempus AI(TEM.US) and Palantir Technologies(PLTR.US) gaining over 20% in a week, and SoundHound AI(SOUN.US) rising more than 10%.

2. Cloud Computing Giants Join the AI Race

Cloud Providers Embrace DeepSeek

• China's Domestic Cloud Providers: Following the integration of DeepSeek by major Chinese cloud platforms such as Alibaba Cloud, Baidu Smart Cloud, Huawei Cloud, Tencent Cloud, Volcano Engine, and Tianyi Cloud, JD Cloud recently announced the official launch of the DeepSeek-R1 and DeepSeek-V3 models. These models now support both public cloud online deployment and mixed private deployment options.
• International Cloud Providers: Global cloud giants like Amazon.com, Inc.(AMZN.US) AWS and Microsoft Corporation(MSFT.US) Azure have also officially announced their support for the DeepSeek models.

Chipmakers Rally Behind the Model

• China's Domestic Chip Manufacturers: Huawei has launched DeepSeek-R1, DeepSeek-V3, DeepSeek-V2, and Janus-Pro on the Ascend Community, making these models compatible with Ascend hardware platforms for out-of-the-box use. Additionally, Chinese chipmakers such as Tianxiao Zhixin, Moore Threads, and Haiguang Information have announced their support for DeepSeek models as of February 4th.
• International Chip Giants: International chip leaders like NVIDIA Corporation(NVDA.US), Advanced Micro Devices, Inc.(AMD.US), and Intel Corporation(INTC.US) had earlier completed their support for the DeepSeek models.

As DeepSeek’s ecosystem expands, analysts predict accelerated adoption of low-cost AI models and broader vertical applications. Huajin Securities stated that global tech leaders’ embrace of DeepSeek could trigger a "revaluation of software-hardware ecosystems" and hasten AI-driven innovation.

3. Institutions Bullish: Goldman Sachs and Citi Highlight China’s AI Potential

TF International Securities analyst Ming-Chi Kuo identified two critical AI trends post-DeepSeek-R1:

1. Sustained AI Compute Growth: Optimized training methods will continue to boost AI capabilities despite diminishing returns from scaling laws.
2. Plummeting API/Token Costs: Lower costs will accelerate diversification in AI software/services and edge AI applications.

Goldman Sachs emphasized China’s AI advancements in a recent report, citing DeepSeek-R1 as evidence. The firm projects that breakthroughs in AI adoption across industries could lift corporate profitability and valuations, with AI-related investments offering an expected 9% return. Additionally, narrowing valuation gaps between U.S. and Chinese tech stocks could drive a 20% rally in the latter. The bank recommends focusing on TENCENT HOLDINGS LIMITED(TCEHY.US), Alibaba Group Holding Ltd. Sponsored ADR(BABA.US), and Baidu, Inc. Sponsored ADR Class A(BIDU.US), which are actively expanding in AI fields like computer vision, NLP, and cloud computing.

Citi highlighted DeepSeek’s pre-Chinese New Year rise to the top of U.S. app store rankings. While the model is renowned for overcoming China’s hardware constraints, the bank argues that Chinese internet giants’ AI investments and LLM progress remain undervalued. Citi believes DeepSeek’s cost efficiency will accelerate global AI development and spur innovation, potentially marking a 2024 inflection point. Its top picks are Alibaba Group Holding Ltd. Sponsored ADR(BABA.US), TENCENT HOLDINGS LIMITED(TCEHY.US), and Baidu, Inc. Sponsored ADR Class A(BIDU.US).

4. Seizing the New AI Wave: Promising Stocks to Watch in Key AI Sectors

The explosive growth of DeepSeek has brought new attention to AI on a global scale, and it is expected to accelerate the adoption of AI applications and cloud software services, leading to emerging investment opportunities. Below is a list of prominent AI-related stocks that are likely to capture investor interest in the U.S. markets: