TSX runs higher on rate cut expectations
Tuesday - In response to the tech market sell-off Monday triggered by DeepSeek's success, Gene Munster of Deepwater Asset Management shared insights on the situation. Munster suggested that the market's response might be exaggerated, pointing out that the demand for AI infrastructure continues to grow at a pace underestimated by many investors.
DeepSeek's advancements, which Munster believes to be a step forward in chip architecture, have yet to be quantified in terms of their true impact, with improvements potentially ranging from 5% to 500%. Despite this uncertainty, Munster emphasized that the real story being overlooked is the potential for increased investment in AI infrastructure. This comes from the belief that advancements in model training efficiency could bring the goal of achieving artificial general intelligence closer to reality.
The market's nerves are expected to remain until key earnings reports are released. Munster highlighted that the tech industry is poised for a critical moment on Wednesday afternoon, as earnings from Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Tesla (NASDAQ:TSLA) are announced. The cost of model training is anticipated to be a central topic during these disclosures.
Additionally, Munster noted that further clarity might come from Nvidia (NASDAQ:NVDA)'s earnings report, which is scheduled for February 26th, marking 21 trading days from the statement. The tech community and investors are keenly awaiting these reports to better understand the implications of recent developments in AI and the semiconductor industry.
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