To The Moon

Performance of Global Equity Indices(in US Dollar)

Source: Bloomberg, Tiger Brokers

DeepSeek Disrupts the Global AI Landscape, Computing Power Demand Continues to Rise—Where Will Future Opportunities Lie?

• Recently, DeepSeek launched China's first large model with inference capabilities on par with OpenAI, achieving this at less than one-tenth of the cost. This move has sparked widespread discussion within the industry, significantly boosting confidence in Chinese tech stocks while also causing major volatility in U.S. AI-related stocks.

• After two weeks of fermentation, the market has largely digested the DeepSeek event. Discussions surrounding computing power and NVIDIA have also reached a general consensus: demand for computing power will not decline but will continue to rise. At its core, DeepSeek represents efficient and low-cost AI inference, intensifying competition among model developers and application providers, which is ultimately beneficial for the AI ecosystem. This trend is also reflected in the recent earnings reports of Microsoft, Google, and Amazon, where cloud providers have significantly increased their capital expenditures.

Source: Bloomberg, Tiger Brokers

• Therefore, we believe that the future opportunities in the AI technological revolution will mainly focus on the following three areas:

1. The core logic of the AI industry chain remains unchanged—chips and semiconductors continue to be the most certain and promising sector at this stage. NVIDIA’s growth will ultimately depend on yield rates and shipment volumes.

2. Downstream applications may experience a surge, with internet companies, data centers, and SaaS enterprises expected to leverage AI for profit growth.

3. The Greater China technology sector could see a valuation boost, as DeepSeek has significantly rekindled global investors’ interest in Greater China assets.

Divergence in U.S. Economic Data, Tariff Impact on Inflation Expectations, and an Uncertain Rate Cut Path

• Recently, the U.S. January economic data was released, revealing divergences across key indicators. Manufacturing PMI climbed above the expansion-contraction threshold for the first time in two and a half years, but services PMI cooled to 52.8, still in expansion territory but falling short of market expectations. Additionally, Friday’s nonfarm payrolls data came in well below expectations, yet the unemployment rate was lower than forecast. Moreover, wage growth unexpectedly surged.

• These contradictory signals highlight the complexity of the U.S. economy. The key issue preventing the Federal Reserve from cutting rates remains persistent inflation, particularly sticky service-sector inflation. While the services PMI showed slight cooling, stronger-than-expected wage growth has added further uncertainty. Furthermore, although January’s nonfarm payrolls appeared weak, the data for December and November was significantly revised upward. Therefore, despite seeming contradictions, the underlying strength of the economy has not materially weakened.

Source: U.S. Bureau of Labor Statistics，Tiger Brokers

• At the same time, despite wage growth far exceeding expectations, the University of Michigan Consumer Sentiment Index unexpectedly declined. Correspondingly, short-term consumer inflation expectations surged to 4.3%, returning to late 2023 levels. One major driver behind this shift could be Trump’s tariff policies.

• Although tariffs on Canada and Mexico were paused at the last minute, we believe that Trump’s commitment to tariffs should not be underestimated. In his inauguration speech last month, Trump highly praised former U.S. President William McKinley, who was known for his protectionist tariff policies. Looking ahead, not just China, Canada, and Mexico—but also Europe, Japan, South Korea, and Southeast Asia—could become targets of U.S. tariff pressure. Amid such uncertainty, the rate cut path remains increasingly unpredictable, and investors should be cautious about U.S. stock market risks this year!

Source: CME Group, Tiger Brokers