Wall Street has been trying to stage a moderate rebound following a steep stock sell-off triggered by concerns over Chinese startup DeepSeek and its potentially cheaper AI model's impact on Big Tech.
The market turmoil stemmed earlier this week from claims by DeepSeek, a startup that has developed an AI assistant using cheaper chips and less data than existing models while delivering a comparable performance.
However,ASML Holding NV’s Chief Executive Officer, Christophe Fouquet, downplayed concerns about the impact of artificial intelligence-driven demand on its chipmaking machines, as quoted on Yahoo Finance.
Addressing the media on Wednesday, ASML CEO emphasized that cost reductions in AI are a positive development for ASML. “Lower cost means AI can be used in more applications, and more applications mean more chips,” Fouquet stated. This should be good news for the whole chip industry. Semiconductor-based exchange-traded fund ETF VanEck Semiconductor ETF SMH should stand to benefit.
Strong Q4 Performance Driven by AI
The Dutch lithography machine maker reported robust fourth-quarter results, significantly surpassing analyst expectations. ASML booked more than twice as many orders as anticipated, fueled by the expanding AI sector.
Fouquet remains optimistic about AI’s future, stating, “We are still very bullish. This is such an opportunity that we can expect more and more players.” As AI becomes more widespread, he expects AI chips to be integrated into various applications, further driving demand for ASML’s technology.
China’s AI Advancements Despite Restrictions
DeepSeek’s breakthrough raised speculation that Chinese engineers have developed AI solutions that operate efficiently despite limited access to cutting-edge semiconductor technologies. The United States has restricted exports of advanced semiconductor equipment to China in an effort to curb its AI progress. ASML, in particular, has never been permitted to sell its extreme ultraviolet lithography machines to China due to these regulations.
Widespread Use of AI & Future Outlook
ASML’s Chief Financial Officer, Roger Dassen, highlighted that DeepSeek’s AI efficiency could accelerate AI adoption worldwide, bolstering the entire industry. Despite geopolitical challenges, ASML remains confident in AI’s expanding role and the increasing need for advanced chips, which will leave a bullish impact on the industry’s future.
Microsoft CEO Satya Nadella highlighted the same concept in a tweet, noting that greater AI efficiency would likely lead to skyrocketing usage (read: DeepSeek AI Fears Overrated? ETFs in Focus).
AI ETFs in Focus
With AI technology rapidly advancing and becoming increasingly integral to various industries, investors must be looking for ways to capitalize on this trend. Below, we highlight a few AI-focused exchange-traded funds (ETFs) for investors.
Global X Robotics & Artificial Intelligence ETF BOTZ – Expense Ratio: 0.69%; Up 4.5% this year
First Trust Nasdaq Artificial Intelligence and Robotics ETF ROBT – Expense Ratio: 0.65%; Up 5.7% this year
Themes Generative Artificial Intelligence ETF WISE – Expense Ratio: 0.35%; Up 3.5% this year
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VanEck Semiconductor ETF (SMH): ETF Research Reports
Global X Robotics & Artificial Intelligence ETF (BOTZ): ETF Research Reports
First Trust NASDAQ Artificial Intelligence and Robotics ETF (ROBT): ETF Research Reports
Themes Generative Artificial Intelligence ETF (WISE): ETF Research Reports
