Reuters: Nasdaq drops for 2nd day as AI jitters rattle tech investors

August 20, 2025

DeepSeek’s update landed on Tuesday represents a serious cocktail of capability

NASDAQ DROPS FOR 2ND DAY AS AI JITTERS RATTLE TECH INVESTORS“—We were asked by Reuters for our thoughts and insights on the market move—DeepSeek AI may be the trigger again—reporting by Carolina Mandl, Johann M Cherian, Laura M., Suzanne McGee, and Gertrude Chavez-Dreyfuss.

QUOTED EXCERPTS

MICHAEL ASHLEY SCHULMAN, CHIEF INVESTMENT OFFICER, RUNNING POINT, EL SEGUNDO, CALIFORNIA:

“Tuesday’ s U.S. technology stock swoon and its continuation today looks like multiple compression meeting a little margin math, but the timing makes it hard to ignore the new elephant in the server room. Names that had been sprinting on AI dreams pulled back hard, with NVIDIA, AMD, and Palantir among the drags.”

“DeepSeek’s update landed on Tuesday represents a serious cocktail of capability and availability and traders well remember the original harsh tech-market pullback DeepSeek caused when it was first broadly recognized in January of this year.”

ALSO QUOTED in the write-up:

🟠Chris Murphy, Co-Head Derivatives Strategy at Susquehanna
🟠Christopher Vecchio, CFA, Head of Futures and Fores at TastyLive
🟠Art Hogan, Chief Market Strategist at B. Riley
🟠Brian Jacobsen, Chief Econoist at Annex Wealth
🟠Seth Hickle, CMT at Mindset Wealth
🟠Philip S. Blancato, CEO at Ladenburg Thalman
🟠Steve Sosnick, Chief Strategist at Interactive Brokers
🟠Adam Sarhan, CEO at 50 Park

ADDITIONAL THOUGHTS

DeepSeek AI V3.1 landed yesterday morning with a rolling thunder🌩️you could almost hear through the racks. VentureBeat reports a 685 billion parameter open model, an extended context window, and early tests that put it in the same weight class as top proprietary systems, with downloads flowing through Hugging Face.

My bottom line stays simple and slightly impolite😏 AI IS NOT LESS INEVITABLE, IT IS MORE COMPETITVE. When competition rises, valuation flies back from dreamy forecasts to unit economics.

DeepSeek V3.1 may not have caused Tuesday’s drop by itself, but it definitely added a sharp new question mark above the multiples that depend on LLM closed models being superior. That kind of question rarely crashes markets in a day, it just grinds away at assumptions until the spreadsheets remember gravity.

NVIDIA’s bottleneck is diplomacy — Photography and design by Yrtist.com

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