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Why AMD Is Losing Ground Today

Chip maker AMD (AMD) is falling  6.5% today after a Chinese startup, DeepSeek, reportedly developed top-notch AI models using outdated semiconductors. AMD’s top and bottom lines have been meaningfully boosted by demand for the AI chips that it develops.

A Look at DeepSeek’s AI Models

DeepSeek’s products appear to be at least as proficient as OpenAI’s ChatGPT and Meta’s (META) AI offering, even though DeepSeek’s systems were built using much older, cheaper chips. Specifically, the Chinese firm reportedly utilized about 50,000 of Nvidia’s (NVDA) H100 AI GPUs and spent less than $6 million in order to create its AI models. The H100 was unveiled back in 2022.

A close up of a complex looking PCB board with several intergrated semiconductor parts.

The Potential Impact on AMD

Microsoft (MSFT), Meta (META), and Alphabet (GOOG) are spending hundreds of billions of dollars to develop AI systems, with some of that money being devoted to new AI chips designed by AMD. DeepSeek’s ability to develop AI models so cheaply is leading to fears that the American tech giants will eventually reduce their expenditures on semiconductors, causing the growth of AMD to significantly decelerate.

Alternatively, some are worried that China will take over the lead in the AI race from America, a development that would likely hurt the financial results of AMD.

While we acknowledge the potential of AMD, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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In fact, Verge argues this company’s supercheap AI technology should concern rivals.

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

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