Deepseek’s claim that he created an AI model trained for only $ 56 million was a bit fearful to investors. However, there were several warnings in the number, and many of the shares affected by the sale recovered rapidly, so the knee reaction of the market was temporary.
First, it’s just training cost. It was not included before the hardware cost or before training. Second, DeepSeek is based in China, so there is a problem with censorship. Finally, there is a question about what kind of information the model will record, so it is unlikely that you will get serious traction for business use in the United States.
All of these conclude that the US AI industry is no problem and most of the sale is overreacting. Still, some companies affected by the sale are now worth buying.
nvidia
nvidia (NVDA -3.67 %) It may look like a head scratcher. If the AI model is more efficient, why do they still need the NVIDIA GPU? Well, these models still need to train something, and DeepSeek trained the model using NVIDIA’s H800 GPU (to meet the US exports for H100 GPUs).
Discovered breakthrough Deepseek is genuine and worth noting, but does not reduce the fact that a large amount of computing power is required to create and process these models. In addition, DeepSeek’s goal was to create AI models that match the most efficient way to perform model performance, such as Chatgpt. Most US AI companies are pushing the boundaries of what AI can do and are not very worried about their current efficiency.
This means that US AI companies are seeking the power and abilities of life. This brings great profits to NVIDIA. As a result, nearly 20 % of NVIDIA’s shares have not been justified and have already collected some losses from the sale.
The latest information on the state of the industry will be obtained during the NVIDIA’s 4th quarter of FY2025 (used on February 26), but despite Deepseek’s breakthrough, GPU spending is still powerful. I want to predict. buy now.
Taiwanese semiconduct
Like NVIDIA, Taiwan Semiconductor Manufacturing (TSM 0.56 %) Chips are used throughout the industry to execute and train these models. Its chips will be on the powerful computing devices of NVIDIA and ADVANCED MICRO devices and Apple’s smartphones. You can also find them in almost every car produced.
A huge number of chips are needed to support various AI workloads, which are long -term boosts of Taiwan semiconductors. In fact, the management team believes that in the next five years, a 20 % complex growth rate (CAGR) will be found for revenue. It is an incredible growth, and what has been revealed over the past few weeks does not change its projection.
Despite these strong growth goals, the Taiwanese semiconductor stock is not so expensive.
TSM PE ratio (forward) data by YCharts
With 22.5 times forward income, it is traded at almost the same price as the S & P 500 index. This indicates that TSMC is expected to provide market average growth.
As a result, the shares scream. This is because the price of the growth is not priced, and is likely to succeed in the compliment of those who win AI Arms Race.
KEITHEN DRURY is a post of NVIDIA and TAIWAN semiconductor production. Motley Fool has appeared and recommended in Advanced Micro Devices, Apple, Nvidia, and Taiwanese semiconductors. Motley fools have a disclosure policy.
