Key Takeaways:
JPMorgan is defending two artificial intelligence stocks after the launch of a rival model triggered a sell-off, calling the market’s reaction an overreaction and reiterating “Overweight” ratings on both KNOWLEDGE ATLAS (02513.HK) and MINIMAX-W (00100.HK).
The broker saw the market decline as an over-reaction, a JPMorgan research report said, viewing the launch of DeepSeek's V4 model as a "tailwind for the industry rather than a zero-sum shock."
Following the DeepSeek V4 preview, shares of KNOWLEDGE ATLAS and MINIMAX-W fell around 9% each. JPMorgan maintained its price targets of $950 for KNOWLEDGE ATLAS and $1,100 for MINIMAX-W, recommending clients accumulate shares on the pullback.
The sell-off highlights investor anxiety over intense competition in the AI sector, where new models can threaten incumbents. However, JPMorgan believes the new launch reinforces industry pillars like cost compression and will expand the market rather than simply rebalance market share.
The note suggests that fears of a competitive shock from DeepSeek, which is noted for its cost-efficiency and partnership with Huawei, are misplaced. Investors will be watching upcoming earnings from KNOWLEDGE ATLAS and MINIMAX-W to see if their performance validates JPMorgan's bullish stance.
This article is for informational purposes only and does not constitute investment advice.
