Tuesday, 28 January 2025 Reading time : 2 minutes

Nvidia's shares suffered a historic setback at the start of the week, falling nearly 17% on Monday (closing at USD 118.58), wiping nearly USD 600 billion off the US tech giant's market capitalisation. This is the largest one-day loss ever suffered by a single company on the US stock market. Chipmaker Broadcom was also among the big losers (-17.4%), while rival Qualcomm (-0.5%) fared comparatively well. The technology index Nasdaq Composite lost 3.1%. 

The catalyst for the sell-off originated in China, or more specifically Hangzhou, where start-up DeepSeek is based. Last week, DeepSeek unveiled the latest version of its artificial intelligence (AI) chatbot – DeepSeek R1 – which the company claims uses significantly fewer chips than competing models to deliver comparable performance. 

In doing so, DeepSeek is not only positioning itself as an alternative to the most widely used chatbots today, such as ChatGTP (OpenAI), Gemini (Alphabet) or Claude (Anthropic), but is also casting doubt on whether the billions that US tech giants are investing in the development of AI will pay off. According to a report in the Financial Times, citing a study by UBS, the leading US tech companies invested around USD 224 billion in AI last year.

The new AI application from China has been well received by users, as a look at downloads in the iPhone App Store shows. DeepSeek tops the free download charts, followed by its rival ChatGTP in second place. However, it remains to be seen whether DeepSeek can establish itself as a real alternative to the big US tech companies. 

The Barrier Reverse Convertible on three US chipmakers offers yield potential: the product, which has a short subscription period, features a barrier of 54% and pays an annual coupon of 15.00%.

Barrier Reverse Convertible on US Chipmakers
15.00% p.a. BRC on Nvidia, Broadcom and Qualcomm
Barrier: 54%
Valor: 140 251 360

Indicative terms

 

Disclaimer
This communication is for marketing purposes. It is neither an offer nor an invitation to submit an offer, to purchase or to subscribe to securities and does not constitute investment advice. You should consult your advisors before making an investment decision. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, financial condition, development or performance of the issuer to be materially different from any future results, financial condition, development or performance expressed or implied by such statements. The present document has not been drawn up by the research department as defined in the rules of the “Directives on the Independence of Financial Research” published by the Swiss Bankers Association, hence these rules do not apply to this document. If securities are mentioned in the communication, the base prospectus, the final terms and any key information document may be obtained free of charge from Zürcher Kantonalbank, Bahnhofstrasse 9, 8001 Zurich, VRIS, and from www.zkb.ch/finanzinformationen.
© 2025 Zürcher Kantonalbank. All rights reserved.