JPMorgan picks the stock winners and losers after cheap DeepSeek upends AI trade

DeepSeek’s status as an artificial intelligence disruptor might actually benefit some stocks in the space, according to JPMorgan. Stocks sold off across the board last week after Chinese startup DeepSeek emerged as a powerful threat to existing AI investments. Specifically, DeepSeek’s relatively inexpensive costs — combined with its high efficiency — raised concern over the the level of capital being funneled into the space by companies in the last few years, and whether it was all necessary. Since the market meltdown, stocks have managed to claw back a substantial portion of their losses, partially due to the notion that DeepSeek’s emergence could benefit the technology space. “A key theme to come out of their analyses is the potential for reduced training and inference costs, which could lead to balancing acts between (1) the decreased need for large-scale investment in current applications versus the rapid propagation of new AI applications that were previously not economically viable; and (2) a potential value shift both up to the application layer (inferencing) and down to the infrastructure layer (training),” wrote JPMorgan analyst Claudia Hueston in a note to clients. JPMorgan compiled a list of stocks that will see both positive and negative impacts from DeepSeek’s influence. Below are some of the winners: Cloud stock Snowflake was listed by JPMorgan as a potential beneficiary. “We see limited exposure to commoditization at the foundational model development layer, while this evolution may enable more AI apps to be built and in turn create greater needs for modern data infrastructure,” wrote JPMorgan analyst Mark Murphy. Most Wall Street analysts are currently bullish on Snowflake, although the average price target implies just a 4% upside, according to LSEG. Shares have fallen more than 14% over the past 12 months. JPMorgan also highlighted Broadcom as another potential winner. “Historically, new technology innovation cycles (especially compute efficiency) have driven increased proliferation/demand, which has resulted in more/higher value semiconductor demand as well,” wrote analyst Harlan Sur. “Broadcom is the #1 custom ASIC supplier supporting key cloud/hyperscalers including Google, Meta, and OpenAI — Broadcom also enables strong compute efficiency unlock via their #1 position networking silicon.” Wall Street consensus towards Broadcom is overwhelmingly bullish, and the stock’s average price target corresponds to a 5% potential upside, LSEG data shows. The semiconductor manufacturer has soared 85% in the last 12 months. The broader internet ecosystem should also benefit from DeepSeek’s advancements and cost efficiencies, wrote JPMorgan analyst Doug Anmuth — Specifically highlighting “Magnificent Seven” giants Amazon , Alphabet and Meta Platforms. “We expect META to benefit from DeepSeek as it builds on new model advances & incorporates them into Llama 4 (launching early 2025) & future versions,” he wrote. “At 4Q earnings, META reiterated the benefits of open source LLMs, noted that costs can be driven down, & — in light of DeepSeek — emphasized the importance of having an American standard for open source that extends globally.” Most analysts covering Meta have assigned the stock either a strong buy or buy rating, LSEG data shows. Shares of Meta have surged 56% in the last 12 months. There are some potential losers, however: One notable name on the list was semiconductor manufacturer Intel . The stock has lost more than half of its value over the past year as the company struggles to keep up with rivals such as AMD and Nvidia. According to JPMorgan, DeepSeek’s impact could exacerbate Intel’s woes. “As compute complexity continues to grow, we believe there will be a continued shift to accelerated computing, which would negatively impact server CPU demand,” Sur added. Most analysts covering the stock are currently neutral on its outlook, although Intel’s average price target implies a nearly 33% upside, according to LSEG. Other possible losers include Oracle, which has soared 47% over the past 12 months.