Are Cheap Chinese Stocks Good to Buy After DeepSeek’s Strong Introduction?
Yesterday we saw the strongest reaction in stock markets ever as Nvidia lost $600 billion after the launch of DeepSeek, but Chinese Stocks showed resilience, as this new cheap AI lowers spending in the sector, which means lower inflation.
| Broker | Review | Regulators | Min Deposit | Website | |
|---|---|---|---|---|---|
| 🥇 |  | Read Review | FCA, CySEC, ASIC, MAS, FSA, EFSA, DFSA, CFTC | USD 100 | Visit Broker |
| 🥈 |  | Read Review | FSCA, FSC, ASIC, CySEC, DFSA | USD 5 | Visit Broker |
| 🥉 |  | Read Review | CySEC, MISA, FSCA | USD 25 | Visit Broker |
| 4 |  | Read Review | ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB | USD 200 | Visit Broker |
| 5 |  | Read Review | ASIC, FCA, CySEC, SCB | USD 100 | Visit Broker |
| 6 |  | Read Review | FCA, FSCA, FSC, CMA | USD 200 | Visit Broker |
| 7 |  | Read Review | BVI FSC | USD 1 | Visit Broker |
| 8 |  | Read Review | CBCS, CySEC, FCA, FSA, FSC, FSCA, CMA | USD 10 | Visit Broker |
| 9 |  | Read Review | ASIC, CySEC, FSCA, CMA | USD 100 | Visit Broker |
| 10 |  | Read Review | IFSC, FSCA, ASIC, CySEC | USD 1 | Visit Broker |
The AI Investment Paradigm Under Threat
The prevailing market narrative regarding AI has centered on two key assumptions. First, long-term job displacement due to AI is expected to reduce inflation. Second, the construction and training of AI systems are thought to require massive investments in chips and electricity, leading to short-term inflationary pressures. However, DeepSeek has thrown a wrench into this reasoning by proving that AI training depends more on methodology than sheer computational power.
DeepSeek’s breakthrough—open-sourced and available for free—demonstrates that its model operates with only about 3% of the computational resources required by OpenAI’s o1 model. Whether DeepSeek relied on a hidden cache of H100 chips is now largely irrelevant; the system can run locally and is poised to dramatically lower the barriers to AI adoption. This revelation puts semiconductor investments and large-scale energy infrastructure expansion into question, reshaping the broader economic implications of AI development.
Implications for Markets
The U.S. clampdown on semiconductor exports, previously seen as a major challenge for China, might now have less significance in light of this advancement. Some speculate that China’s success with the model, whether through innovation or less transparent means, reflects their growing capabilities in AI development. This narrative may rekindle interest in Chinese equities, which remain undervalued and largely out of favor.
Adding fuel to this potential rally is the upcoming March 7 National People’s Congress, where stimulus measures are widely anticipated. The market loves a good underdog story, and with Chinese stocks being cheap, disliked, and now tied to a groundbreaking AI milestone, traders may look to capitalize on a rebound. Chinese equities saw a sharp reversal in January, sliding in the first half of the month but rebounding strongly in the second half, a trend that could signal further gains ahead.
A Shift in AI Economics
The reduced cost of developing and deploying AI could accelerate its adoption globally. By undermining the assumption that AI requires massive infrastructure investments, DeepSeek’s innovation signals a broader democratization of the technology. This could further disrupt semiconductor demand and energy infrastructure plans while opening the door for more players to participate in the AI space. In the short term, this shift is bound to reshape market dynamics, with sectors linked to AI hardware facing uncertainty while software-driven applications thrive.
ABOUT THE AUTHOR
See More
Add 3442
Related Posts
Add 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals
Top Broker