DeepSeek’s AI models claim to match OpenAI performance with lower costs and less advanced chips, which has had a negative impact on semiconductor stocks.
Despite DeepSeek’s claims, scaling AI applications will always require advanced chips, especially considering the early stages of AI adoption.
Nvidia remains an attractive investment because of its leading position in the GPU market and the significant growth expected in FCF
Competition from AI models underlines the need for continued investment in advanced chips, making NVDA a beneficiary rather than a victim.
Moreover we see strong entry points for custom chips players that should still benefit from tremendous amount of CAPEX, among them we particularly like Broadcom and Marvell.
Finally Infrastructure remains key and leader in liquid cooling Vertiv presents a strong entry point.