On ‘Varney & Co.’, Mark Mahaney, Senior Managing Director at Evercore ISI, addressed concerns about whether China’s DeepSeek AI app poses a threat to U.S. Big Tech stocks. Despite the initial stir caused by DeepSeek at the beginning of the week, Mahaney does not see it as a significant challenge to companies like Meta. He explained that Meta benefits from innovations in AI technology rather than being directly threatened by them, as the company operates more like an app store, leveraging improvements and cost efficiencies in AI models to enhance its own offerings rather than selling them.
Mahaney pointed out that Meta, among the mega-cap tech stocks, actually saw an increase in market capitalization following the DeepSeek discussion, suggesting that the market views such developments as beneficial rather than detrimental to Meta’s business model. He emphasized that Meta’s focus on user engagement and advertising, rather than on selling AI or tech infrastructure, positions it uniquely to capitalize on advancements in AI technology.
Regarding the broader performance of Big Tech, Mahaney acknowledged that there has been a noticeable slowdown in momentum for the sector recently. He highlighted that while companies like Netflix (NFLX) and Meta (META) have reported strong results, leading to stock gains, other giants like Nvidia (NVDA) and Microsoft (MSFT) face different challenges. Nvidia might see questions raised by developments like DeepSeek, while Microsoft could experience issues with its cloud computing business growth. Amazon’s (AMZN) upcoming performance will be critical to see if it aligns with or diverges from Microsoft’s trends.
Mahaney also shared insights on individual stock performances, noting Amazon’s recent record highs, which he had anticipated. However, he admitted that the valuations for many tech stocks are now high, reducing the upside potential unless there’s a market pullback. He remains particularly bullish on Uber (UBER), citing its undervalued status and potential for growth, despite the controversy surrounding his bullish stance on this stock.
Overall, Mahaney’s analysis suggests a nuanced view of Big Tech in the face of emerging competitors like DeepSeek. He advises patience, indicating that while the current valuations might not offer significant upside immediately, any market correction could present buying opportunities for these fundamentally strong companies.
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