LIVE MARKETS-Deepseek mauling ignites appetite for AI stocks at bargain prices

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DEEPSEEK MAULING IGNITES APPETITE FOR AI STOCKS AT BARGAIN PRICES

Not everyone sold U.S. stocks after DeepSeek's low-cost artificial intelligence model gave a reality check to the tech-related giants whose valuations have ballooned over the past two years.

J.P. Morgan estimated that some retail investors donned a risk-on mode on Monday, with net buying of $1.27 billion in cash equities and $1.26 billion in options.

Institutional investors also lapped up stocks that looked cheaper, with equities witnessing $14.2 billion of net cash buying and $2 billion in options delta during market hours, the brokerage said.

Strong demand was seen for largecap tech and broad-based multi-cap exchange traded funds (ETFs) with at least four of them seeing inflows of $700 million, J.P.Morgan said.

Aurora Mobile's shares JG.O had doubled in value in the previous session, after the China-based firm said it integrated DeepSeek's large language model (LLM).

The stock saw inflows that stood 10 standard deviations higher than its historical long-term average, signaling strong investor interest, according to the brokerage.

Over the past six months retail investors' concentration in the megacap 'Magnificent Seven' group of megacap stocks have been marginal - with Meta META.O leading with 23%, Nvidia NVDA.O at 13% and Apple AAPL.O the least with 4.8%, data by J.P.Morgan showed.

But who can resist when the world's leading chip stock, Nvidia NVDA.O, that jumped more than 800% in value from the end of 2022 through the end of 2024, was trading at 26.76x times its 12-month forward earnings - its lowest in one year, according to data compiled by LSEG.

The stock alone saw inflows of 1 standard deviation above its historical average according to J.P.Morgan, while on the other hand, short sellers made profits of about $6.7 billion from its 17% decline, according to Ortex data.

Separately, data from Vanda Research also showed retail purchases of Nvidia shares totalled a net $562.2 million on Monday, the largest amount on records going back to 2014.

(Johann M Cherian, Pranav Kashyap)

FOR TUESDAY'S EARLIER LIVE MARKETS POSTS:

TUESDAY'S DATA DISAPPOINTS: CONSUMER CONFIDENCE, DURABLE GOODS, HOME PRICES - CLICK HERE

THE PATIENT IS IN STABLE CONDITION - CLICK HERE

OUT OF THE GATE, DIVIDENDS PROVING NOBLE - CLICK HERE

THE YEAR OF THE SNAKE - CLICK HERE

CAPITAL GOODS: INVESTORS ON ALERT OVER CHINESE COMPETITION - CLICK HERE

THREE CATALYSTS TO SUPPORT EUROPE'S RE-RATING - CLICK HERE

STOXX 600 RISES AS INVESTORS EVALUATE DEEPSEEK IMPACT - CLICK HERE

EUROPE BEFORE THE BELL: FUTURES MOSTLY HIGHER AFTER DEEPSEEK WOBBLE - CLICK HERE