If you were anywhere near Wall Street yesterday you may have felt a great disturbance in the Force, as if millions of traders suddenly cried out in terror as nearly $1 trillion in market value was wiped out in a single day.

The culprit? China’s latest breakout AI startup DeepSeek, which produced a smarter version of ChatGPT for a fraction of what US companies have been spending to train their models.

But now that we’re 24 hours out from DeepSeek-gate, it’s clear that the damage didn’t hit all stocks as hard as some feared. In fact, most of the losses were concentrated in the names tasked with building out the AI boom, rather than every single Silicon Valley power player.

For example, Meta Platforms, Amazon, and Apple actually ended yesterday in the green, while Microsoft, Tesla, and Alphabet’s single-digit losses paled in comparison to Nvidia’s 17% drop.

The “picks and shovels” of the AI boom fell the hardest, given that DeepSeek appeared to skip those so-thought-necessary scaling steps altogether. For instance, although energy and utilities were some of the hottest sectors in the market last year based on AI power needs, energy producers such as Constellation Energy, Talen Energy, and Vistra tumbled sharply yesterday.

DeepSeeking some gains

In a moment like this, it can be hard to parse through all the headlines, conflicting opinions, and puns (guilty).

But there’s a myriad of ways experts think you can use yesterday’s selloff to your advantage.

Bank of America analysts argue that DeepSeek’s success will ultimately be bullish for software. “DeepSeek’s innovative training and post-training techniques will likely be incorporated by competing frontier-model developers…Over the longer term, we expect advances at the model level to drive accelerated enterprise AI adoption and usage as chatbots, copilots and agents become simultaneously smarter and cheaper,” the analysts explained. BofA said that Microsoft, Salesforce, Adobe, Intuit, ServiceNow, and Hubspot are the bank’s “top large-cap picks with Agentic AI exposure.”

​​Hightower’s chief investment strategist Stephanie Link highlighted Amazon and Broadcom as two companies that are tied to the AI infrastructure trade, but whose businesses are diversified enough to protect them from any serious damage.

Morningstar’s Brian Colello argued that DeepSeek didn’t necessarily lower his expectations for Nvidia, either. “We believe AI GPU demand still exceeds supply, so while slimmer models may enable greater development for the same number of chips, we still think tech firms will continue to buy all the GPUs they can as part of this AI ‘gold rush.’”

For those more savvy traders, JPMorgan analyst Bram Kaplan pointed to some options strategies to play the moment, including buying call spreads on several stocks with a February expiration, such as Vistra EMCOR Group, Vertiv, and many others.

The bottom line: Don’t freak out. There’s no need to go on a huge tech investing spree today if it doesn’t align with your long-term strategy. Then again, if you’re already bullish on Nvidia (or the rest of the AI trade), you may be getting a bargain right now.—LB

🟢 What’s up

• One Mag 7 stock avoiding the DeepSeek downturn: Amazon, which rose 1.16% to a new all-time high this afternoon.
• Speaking of, Nvidia recovered a good chunk of yesterday’s losses as panic subsided and investors spotted a buying opportunity. Shares climbed 8.82% today.
• RTX, formerly known as Raytheon Technologies, gained 2.69% following strong earnings for the defense contractor and expectations of bigger profits ahead.
• Trump’s latest tariff talk targeted Taiwan, particularly semiconductor chips made there. TSMC shrugged off the news, rising 5.25%.
• Brighthouse Financial popped 14.17% on reports that the insurer is looking to sell itself to the highest bidder.
• A rising tide lifts all boats: Carnival and Norwegian Cruise Lines climbed 8.14% and 7.77%, respectively, following positive results from Royal Caribbean that indicated strong demand for cruises in 2025 (more on that later).

What’s down

• General Motors popped on an earnings beat and promises of a strong fiscal 2025, then dropped 8.89% after investors decided they don’t believe management can pull it off.
• Lockheed Martin reported strong sales growth last quarter, but the defense contractor still fell short of analyst expectations, and forecasts of slower growth ahead didn’t help. Shares sank 9.18%.
• Juniper Networks sank 6.06% on reports that the Department of Justice may block Hewlett Packard Enterprise’s acquisition of the IT services company.

Royal Caribbean sailed 12% higher after the cruise operator announced another quarterly earnings beat, extending its winning streak. The company also sees smooth sailing ahead, projecting 23% earnings growth in fiscal 2025. Management pointed to yield growth and cost discipline as its “formula for success,” and the company was buoyed by Gen-Z’s newfound love for hitting the high seas.

Boeing managed to ascend 1.50% today despite yet another abysmal quarter. The beleaguered aircraft manufacturer posted a roughly $4 billion loss in the fourth quarter, and its annual loss added up to $11.83 billion—its largest since 2020. New CEO Kelly Ortberg reassured investors that the company was ahead of where he expected it to be in its recovery, but the stock still looks like a train plane wreck.

JetBlue Airways descended 25.71% in its worst day of trading in company history, despite the fact that the airline beat analyst expectations for both earnings and revenue last quarter. Yet its forward-looking guidance disappointed investors: The firm said it’s reducing routes, will receive lower revenue per available seat mile than analysts predicted, and is desperately trying to cut costs, all while its competitors continue to report stellar results.—LB

• The US government is getting its own ChatGPT.
• Novo Nordisk got a nice bump late in the day after the FDA approved weight-loss drug Ozempic for treatment of chronic kidney disease.
• Home prices rose 3.8% year over year in November, up from the 3.6% increase in October.
• Leveraged single-stock ETFs have been a hot investment lately thanks to the potentially massive gains—but Monday’s selloff clearly illustrates their risks.
• Who is going to buy TikTok? Perplexity AI wants a shot.
• Scott Bessent will officially become the 79th secretary of the US Treasury.
• Considering a career in finance, and wondering if you should get your CFA or CFP? The numbers point to a CFP.

The Federal Reserve’s best and brightest have sequestered themselves to talk inflation, interest rates, and how good that White Lotus season 3 trailer looks. We’ll hear from Jerome Powell tomorrow afternoon for word on the latest interest rate move, though the market is currently putting the odds that the Fed lowers interest rates at 0.5%.

As for earnings, Tesla, Microsoft, and Meta Platforms are the big three members of the Magnificent 7 dropping their latest numbers tomorrow after the bell. Since those stocks will likely steal the spotlight, here are a couple of non-Mag 7 stocks to keep an eye on:

Before the open

ASML Holding is the first semiconductor company to report since DeepSeek shook the AI trade to its core, and you better believe analysts will have a lot of questions for management about capital expenditures during the earnings call. But it’s the systemic issues that shareholders should focus on, particularly what tariffs will do to this Dutch company’s bottom line. Shares have struggled lately, but that just means the bar is low, and Wall Street analysts covering the stock are unanimously bullish. Consensus: $6.71 EPS, $9.02 billion in revenue.

After the close

At first glance, IBM is a legacy tech company left behind by the latest innovations. But let’s be clear: IBM is no Dell. The company has made significant strides in AI, the cloud, and quantum computing, all of which are long-term bets that make its undervalued shares look particularly appealing. Throw in a steady dividend as a bonus to keep shareholders happy while they wait for these bets to pay off, and IBM may make sense for your portfolio. Consensus: $3.79 EPS, $17.6 billion in revenue.

You asked for it, now it’s here: We’re kicking off Round 2 of our Brew Markets Fantasy Investing League, and it’s bigger and better than ever!

For those who didn’t participate last year, here’s how this works. Everyone starts with $100,000 to invest as they see fit (it’s fake money, sorry to disappoint). We’ll run the league from Feb. 3 through Dec. 31, with check-ins every other week and prizes for our leaders at the end of every quarter. The top three finishers at the end of the year get a whole bunch of swag, from water bottles to sweatshirts to a crisp high five from our very own Neal Freyman.

In your feedback after our first edition of the league, a lot of you asked for fewer guardrails for your investments. Well, you’ve got it: This time around there’s no commission on trades, you can use limit orders and stop-loss orders, and there’s even short selling and margin selling.

To participate, simply fill out this form—once you’re done, you’ll be provided with the URL for the league website and the password to join in. The game begins next Monday, so start planning your portfolio now!