The shock introduction of the Chinese Deepseek AI, which claims to be able to provide AI computing services at a fraction of the cost of other AI services, has sent shockwaves throughout the world - and hit the Tel Aviv Stock Exchange, according to Globes.
Leading indices on the TASE dropped around 2.5% today (Monday) in the wake of the Deepseek news and the financial panic all over the world. The last time something like this happened was last August with the news of an increased interest rate in Japan.
In addition to bringing the shares of tech companies down, the decline "infected" non-tech shares on the TASE, including construction (more than 2%), oil and gas (close to 2%), and even banks declined close to 1%. Government bonds did move up slightly.
An expert speaking to Globes said that the panic in the TASE is likely too much and will moderate. For instance, the S&P 500 is 50% tech-based, while the TASE is only 20% tech-based (the rest is real estate and finance).
Another thinks it's too early to tell: "We are only at the beginning of this event, when we don't even know yet how much of an event it really is. The declines are occurring because all technology stocks, particularly the Magnificent Seven, are trading at relatively high valuations, and we're also entering earnings season with a high bar of expectations that there were concerns about whether they would be able to beat.
A third source speaking to Globes said that "this matter could have implications beyond the stock markets, in the technological and military spheres. For example, it could undermine the effectiveness of the sanctions that the US imposed on chip exports to China, which were aimed at creating differentiation and competitive advantage for itself in the world."
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