The DeepSeek sell-off was just two weeks ago, but the stock prices of companies tied to artificial intelligence are starting to look like it never happened. The rise of the Chinese competitor to large language models such as ChatGPT, at supposedly a fraction of the cost , scrambled the narrative of the AI trend and sparked dramatic selling of some of the market’s biggest winners. Shares of Nvidia plunged nearly 17% on Jan. 27, leading to the largest one-day decline in market value of any stock in history. But now Nvidia has recovered most of that one-day drop and is up 3% in midday trading Monday, on track for its fifth straight gain. Other AI trades look to have bounced back even faster. The Global X Artificial Intelligence & Technology ETF (AIQ) is now back above where it was the day of the DeepSeek sell-off, and trading at a record high. AIQ 1M mountain This AI fund has now surpassed its level from before the Jan. 27 sell-off. Oppenheimer technical analyst Ari Wald said in a note to clients that the fund’s rebound looks like the start of a period of outperformance. “The key takeaway is that longer-term bullish trends are intact, and we’re, specifically, bullish on the ETF’s ability to break to a new multi-year relative high vs. the S & P 500,” Wald said. Oppenheimer views the fund as a proxy for the broad AI theme. The ETF’s top holdings include Tencent , Meta Platforms and Accenture , in addition to chip stocks such as Broadcom and Nvidia . The fact that a broader fund is outperforming Nvidia over the past two weeks could be a sign that the AI trade is evolving in the wake of DeepSeek, not going away. “The less money that companies need to spend on AI ‘picks and shovels’ the more profitable companies will be that buy and deploy them, including major cloud companies,” Bill Bird, Oppenheimer’s head of equity research and head of thematic research, was quoted as saying in Wald’s note.
