DeepSeek Could Cause These 3 Stocks to Surge

DeepSeek spooked most AI companies when the market opened this week. In just two years since its founding, this company has surpassed most other AI companies and did so at a ridiculously cheaper cost. DeepSeek-V3 was trained with a budget of just $5.6 million. Moreover, DeepSeek-R1 is achieving performance similar to that of OpenAI’s o1 reasoning model with a fraction of the cost. Not only that, it is open source and can be run locally on consumer-grade hardware.

DeepSeek being open source likely means that mainstream AI companies are soon going to copy DeepSeek’s efficiencies, and we’ll likely see a shift in how AI companies operate. It is a double-edged sword in the sense that companies no longer have to spend as much for as powerful AI models. This is great for consumers too, since AI calls have been getting really expensive. However, semiconductor companies with very big margins may see a reduction in orders, unless mainstream AI companies go all in and try to make use of the excess capacity with even more powerful models. This is likely as long as VC funding continues to flow in.

Things are still quite uncertain, but here are three stocks that are well-positioned to see some benefits from DeepSeek:

Advanced Micro Devices (AMD)

Advanced Micro Devices (NASDAQ:AMD) may not seem like a beneficiary until you look under the hood. AMD has chips that are focused a lot more on efficiency than on performance. Its MI300X chips are very affordable compared to that of Nvidia’s (NASDAQ:NVDA) and this seems in line with where the trends are heading post-DeepSeek. DeepSeek’s open-source approach also aligns with AMD’s strategy of open software ecosystems like ROCm.

AI models are currently making a shift from training to inference, and AMD’s GPUs could gain a lot of traction since this is where AMD excels. The MI300X chips are optimized for larger AI workloads and offer higher memory capacity for inference. In addition, there are reports that DeepSeek also used AMD hardware during its development process. 

AMD has already integrated DeepSeek-V3 into its Instinct MI300X GPUs. This partnership lets DeepSeek-V3 optimize for AMD hardware and has Day-0 support for DeepSeek models to turn AMD into a first-choice platform for the company.

In addition, AMD has MI325X and MI350 rolling out that are both targeting efficiency. Inference is expected to dominate 70-80% of compute demand as AI matures, so I see AMD as a long-term beneficiary of DeepSeek.

Snowflake (SNOW)

Snowflake (NYSE:SNOW) has already been one of the top beneficiaries of DeepSeek gaining popularity. DeepSeek is lowering barriers to entry for businesses that are looking to integrate AI and Snowflake’s consumption-based pricing model will allow higher AI-driven data queries and processing volumes to translate into more revenue.

Snowflake also has AI tools like Snowflake Cortex, which will let enterprises run AI directly on their data. In turn, this avoids costly data transfers, and DeepSeek’s ability to run locally could be useful here. Again DeepSeek is open source, so while it may not directly translate into efficiency for Snowflake, there is a lot that could be learned from DeepSeek to improve products.

Regardless, Snowflake has already started to capitalize on DeepSeek. It has added DeepSeek to its AI Model Marketplace and customers can already deploy it. Wall Street reacted in a bullish way and many analysts went on to upgrade SNOW stock. Wedbush upgraded SNOW for being in the “AI sweet spot” back in November. Snowflake surging as the rest of the market struggled is proof that the analyst behind that comment has been right so far.

The current analyst consensus price target is $198.7.

ASML Holding (ASML)

ASML Holding (NASDAQ:ASML) makes lithography machines for the semiconductor industry. One would think that DeepSeek causing a reduction in advanced AI chips will cause it to suffer, but the opposite could be the case. ASML CEO Christophe Fouquet argues that DeepSeek’s low-cost AI model will expand demand for chips rather than reduce it. He isn’t wrong, since DeepSeek can run locally and enables consumer-grade hardware to run AI locally without an internet connection.

This could cause the need for chips to actually increase, especially consumer grade ones. And since ASML is the sole producer of EUV lithography machines, it can be one of the biggest beneficiaries. In the meantime, it is seeing a lot of demand from hyperscalers.

Q4 results were stellar, with revenue growing 28% to EUR 9.3 billion and net income growing to EUR 2.7 billion. The 2025 outlook also looks great. Revenue is guided to fall around EUR 30 billion to EUR 35 billion.

Analysts have a consensus price target of $868.3 on the stock.

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