By the end of today’s session, most investors have already absorbed the headline: a Chinese startup, DeepSeek, has developed an AI model that reportedly challenges U.S. tech dominance by delivering exceptional performance at a fraction of the cost. The result? A sharp sell-off across AI stocks, with Nvidia down 16%, Broadcom off 18%, and Amazon slipping 3% at the time of writing this article.
But here’s the deeper story: while fears of overinvestment and shifting dynamics in AI spending are legitimate, the market may have overreacted. Industry experts and analysts suggest that these developments, rather than marking the end of the AI investment boom, could create new opportunities for long-term investors. Let’s break down why Nvidia, Broadcom, and Amazon remain compelling buys.
Nvidia (NVDA)
Nvidia’s sharp drop reflects concerns that DeepSeek’s efficiency could reduce the need for its high-performance GPUs. But several analysts believe this fear is overblown. Citi’s Atif Malik maintains a buy rating, arguing that Nvidia’s position as the leader in advanced chips gives it an enduring edge. Meanwhile, Raymond James’ Srini Pajjuri notes that any increased competition will only drive U.S. hyperscalers to double down on Nvidia’s GPUs to maintain their lead in AI.
It’s also worth remembering Nvidia’s role in projects like Stargate, the $500 billion initiative announced last week to build out AI infrastructure in the U.S. With demand for accelerated computing expected to grow as AI use cases expand, Nvidia’s long-term prospects remain strong. For investors who missed last year’s rally, today’s sell-off may offer a rare opportunity to buy in at a discount.
Broadcom (AVGO)
Broadcom’s pullback today stems from similar fears about AI spending, but the company’s diversification provides a unique advantage. Its AI-related custom chips for data centers remain a vital part of its business, but Broadcom also benefits from its recent VMware acquisition, which expands its software portfolio and creates a buffer against AI-specific volatility.
Stephanie Link of Hightower Advisors highlighted this diversification, saying Broadcom’s “non-AI businesses are troughing,” which positions the company for broader stability even as it benefits from AI growth. Analysts also emphasize the resilience of Broadcom’s partnerships with hyperscalers like Google and Amazon, which ensure its relevance in the data center space. For investors seeking exposure to AI with a side of stability, Broadcom offers a balanced opportunity.
Amazon (AMZN)
Amazon’s smaller decline today underscores its broader diversification beyond AI. While its AWS segment, which generated $10.4 billion in operating income last quarter, is central to AI adoption, Amazon remains a giant in e-commerce, commanding 40% of the U.S. market.
Stephanie Link noted that Amazon’s operational improvements and focus on profitability make it an attractive buy during dips. With the long-term growth of cloud computing and AI infrastructure still intact, Amazon offers exposure to these trends without the concentrated risk seen in more AI-specific names.
The Bigger Picture
Disruptions like DeepSeek can create uncertainty, but they often ignite innovation and investment among market leaders. As TD Cowen’s Joshua Buchalter pointed out, “The DeepSeek moment is not the negative market is assuming.” Instead, it highlights the urgency for U.S. companies to leverage their existing advantages, which could drive even greater demand for advanced computing and cloud solutions.
For investors willing to take a long-term view, Nvidia, Broadcom, and Amazon remain strong bets on the continued expansion of AI and cloud computing. Today’s sell-off may be unsettling, but it also offers an entry point to build positions in some of the most innovative and resilient companies in the market.
