Hey Traders,
I’m coming to you from the airport today, heading to Colorado. But before I take off, I want to talk about something that’s been stirring up the markets this week: this so-called ‘DeepSeek’ AI out of China.
If you’ve been watching the headlines, you know what I’m talking about. Over the last few days, we’ve seen tech stocks get obliterated. NVDA, AVGO, and most of the big AI names took a beating after this Deep Seek news dropped.
And let me tell you something — I don’t buy it.
Deep Seek? More Like Deep Fake
China claims it developed an AI that’s faster, cheaper, and better than what companies like Nvidia, Microsoft, and Meta have spent billions building.
They say they did it for just $5.6 million.
Five. Point. Six. Million.
Meanwhile, Microsoft and Meta have poured $65 billion, $85 billion into this AI arms race.
If you believe China cracked the code for a fraction of the cost, then I’ve got some beachfront property in Nebraska to sell you real cheap.
I don’t buy it for a second.
Why AI Stocks Tanked — And Why They’ll Recover
Look, I get why the market reacted the way it did. News like this spreads fast, and nervous traders panic-sell first and ask questions later.
But here’s the thing: these stocks will bounce back. It’s just going to take time.
The selloff was so fast and so hard that we now have to go through what I call a “changing of the hands.”
What does that mean?
It means all the shaky, nervous investors who piled in at sky-high valuations are getting flushed out. Their shares are moving into the hands of longer-term investors with more realistic expectations.
And that’s a good thing.
Because once that transition happens, once we shake off all the weak hands, we’re going to see American AI stocks rally back.
The Bottom Line
DeepSeek? Deep Fake? Call it whatever you want, but I don’t see it changing the long-term AI race.
Yes, the selloff was ugly. But these stocks were running hot, and maybe valuations got a little ahead of themselves.
That doesn’t mean the AI boom is over.
It just means we’re going to see a shakeout before the next leg up.
So stay tuned. The real winners in AI aren’t done yet.
Trade well,
Jack Carter
P.S. For markets like this, you need to see Nate Tucci’s “Fail Safe” Play That Can Give Folks A Chance To Profit Even If They’re Dead WRONG!
