Apple (AAPL) and Meta Platforms (META) stock each jumped greater than 2% on Monday, bucking the trend of their Magnificent Seven peers and providing some respite for tech investors amid a steep sell-off in AI and related names following the discharge of Chinese firm DeepSeek’s latest cost-effective AI model.
In an email on Monday, DA Davidson analyst Gil Luria told Yahoo Finance, “Apple is reacting positively to the DeepSeek news because smaller more efficient models means it would give you the option to have higher AI products within the iPhone.”
Meta CEO Mark Zuckerberg on Friday said the corporate would spend as much as $65 billion this 12 months on AI investments. The corporate has been working on constructing its own AI model, Llama, and DeepSeek’s breakthrough shows possible efficiency gains available to future LLMs.
Firms being hit hardest on Monday, most notably Nvidia, make AI chips that power these models.
Last week, DeepSeek released an AI model competitive with OpenAI’s last week, putting it at the highest of Apple’s app store.
Enterprise capitalist Marc Andreessen wrote in a post on X Jan. 24 that DeepSeek’s latest R1 model is “one of the amazing and impressive breakthroughs I’ve ever seen.” Apple also offers ChatGPT on its latest iPhone.
The reported cost to coach considered one of its latest models was just $5.6 billion, far below OpenAI’s greater than $100 million in spending to coach GPT-4 — prompting concern among the many investment community that hyperscalers are severely over investing in AI infrastructure.
Nvidia (NVDA) and Broadcom (AVGO) led chip stocks down, while the tech heavy Nasdaq dropped 2.6%. Hyperscalers Microsoft (MSFT), Google (GOOG), and Amazon (AMZN) also fell.
Even with Apple stock’s rise Monday, shares are still down 12% from last month as AI smartphones and PCs struggle to realize traction.
The stock was hit with two downgrades last week from Jefferies and Loop Capital amid its struggling iPhone sales. Apple is ready to report earnings after the bell Jan. 30. Nearly all of analysts tracked by Yahoo Finance recommend buying the stock and see shares rising to $246 over the following 12 months.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
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