Part 4/9:
The commentary suggests that despite the initial panic resulting from Deep Seek’s announcement, the investor community recognized that substantial AI investments from enterprises will persist, immune to the recent fluctuations caused by a single competitor. The short-term sell-off is viewed as a temporary adjustment rather than a significant long-term threat.
Algorithmic Trading and Market Reactions
The response to Deep Seek’s rise exemplifies how algorithmic trading can influence stock prices dramatically. When Nvidia stock dipped, algorithmic trading triggered rapid sell-offs due to preset stop-loss orders. The market often overreacts to news, which can create buying opportunities for astute investors who are willing to hold onto their positions for the long term.