1. The biggest story this am is the sinking stock indexes. The Nasdaq is down nearly 4% pre market and the S&P is down nearly 2.5% pre market.
The Wall Street Journal “Stock Market Today: Nvidia Stock Sinks in AI Rout Sparked by China’s DeepSeek. Futures for tech-heavy Nasdaq-100 fall more than 4%”.
Bloomberg. “Chinese artificial intelligence startup DeepSeek rocked global technology stocks Monday, raising questions over America’s technological dominance.”
2. The market drop is due to the concern that a Chinese tech company may have a cheaper and more advanced way to run AI without super expensive chips.
3. Bloomberg further notes “DeepSeek shows that it is possible to develop powerful AI models that cost less,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “It can potentially derail the investment case for the entire AI supply chain, which is driven by high spending from a small handful of hyperscalers.”
4. NVIDIA is down more than 10% pre market. This would put it back behind Apple in the market cap tables. Last week the order was Nvidia then Apple then Microsoft. This is likely to change some today
5. The 5 largest companies by revenues in the US are.
1. Walmart
2. Amazon
3. Apple
4. UnitedHealth Group
5. Berkshire Hathaway
6. Days like this are a reminder to breathe and live with my overall conservative market approach and allocation.
7. We are planning two business to business webinars for March. Please send Ideas and topics. We also host great guests on each the Becker Private Equity and Business Podcast and Becker’s Healthcare podcasts.
8. I was thrilled to be a guest speaker at the law school class of Priya Bathija this last week on health care trends. Priya is remarkable. Also thankful to speak Feb 5th at a class at NEOMED on how to build grow and manage a business.
9. These are great comments by Ray Dalio in an article posted by Rick Newman. These come from talks and interviews at the World Economic Forum.
Here’s what he said: “The most important thing is realizing that competing in the market, there’s alpha and there is beta. To get alpha, you have to take it away from somebody else, right? Beta means there’s an asset class. So first, be humble. Second, diversify well because you don’t pay a cost for the diversification, but you have to know how to risk-balance your investments to diversify. Also, get away from the notion that investments which have done well recently are better investments, rather than more expensive. You have to know the difference between an investment that has gone up a lot and one that has done well.”
I thought these comments were spot on.
PS. There are constant reminders of the old adage. Never overplay your hand.
Scott Becker
Partner, McGuireWoods, Publisher Beckers Healthcare & Becker Private Equity and Business