In a dramatic turn of events, stocks of several major companies experienced significant fluctuations in premarket trading due to technological advancements and market reactions. Constellation Energy and Vistra, key power providers for artificial intelligence (AI) infrastructure, faced steep declines amid concerns about decreasing energy demands. Their stocks, along with Nuscale Power and Oklo, fell by at least 10% as the market adjusted to potential changes in energy needs.
Meanwhile, D.R. Horton saw its shares drop nearly 1% after Bank of America downgraded the stock from a buy to a neutral rating. Nvidia's shares plummeted over 11%, marking its worst performance since March 2020. This downturn followed the release of a free open-source large-language model by Chinese startup DeepSeek in late December. The model, developed in just two months at a cost of under $6 million, has sparked questions about the demand for Nvidia's fastest chips and its competitive edge in the AI sector.
DeepSeek's model has also impacted tech giants like Microsoft, Amazon, and Meta Platforms, whose shares fell by 5%, over 4%, and 2.5% respectively. The emergence of DeepSeek has raised concerns about the future competitiveness of these companies in the AI landscape.
On a more positive note, AT&T's shares rose by 2.3% following the release of stronger-than-expected fourth-quarter earnings. The company reported $32.3 billion in revenue, surpassing analysts' projections of $32.02 billion. Additionally, AT&T earned 54 cents per share, excluding certain items, beating the consensus forecast by 4 cents as predicted by StreetAccount analysts.
The broader market saw further disruptions with Vertiv Holdings experiencing a 16% decline as the AI trade in the U.S. took a hit. Other chipmakers like Broadcom and AMD also saw reductions in their stock values, reflecting the market's volatile response to the latest AI developments.