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Chipmakers in Asia and Europe rebounded on Wednesday after strong corporate earnings from Dutch group ASML added to the previous day’s rally by industry leader Nvidia.
Shares in ASML, one of Europe’s biggest tech companies, rose 6.7 per cent higher in Amsterdam as chief executive Christophe Fouquet hailed the emergence of DeepSeek, the Chinese start-up that sparked a market rout this week, as “good news” for the semiconductor industry.
ASM, another chip stock, rose 5.1 per cent, while the Stoxx Europe 600 Technology index was up 3 per cent, more than erasing Monday’s rout. The Stoxx Europe 600 benchmark was up 0.6 per cent by early afternoon, while US futures were little-changed.
“For AI to be everywhere, we need to see major progress on cost and energy consumption,” Fouquet said, alluding to DeepSeek’s claims that its AI model required far fewer chips to build and is also cheaper to run than larger systems from the likes of OpenAI.
Wednesday’s moves came after Nvidia closed up nearly 9 per cent on Tuesday, recouping around a third of the heavy losses that wiped close to $600bn off its market capitalisation on Monday.
Investors are still trying to figure out the market implications of DeepSeek’s promise to develop AI tools at a fraction of the cost of US rivals, which has been called a “Sputnik moment” for the industry.
But analysts say Monday’s sell-off was exacerbated by the sheer scale of investors’ previous bets on Nvidia, the chief beneficiary of the AI boom in markets.
“What happened on Monday was an extreme overreaction that was amplified by extreme positioning,” said Elyas Galou, global investment strategist at Bank of America.
He pointed to crowded positions in global tech stocks heading into US President Donald Trump’s inauguration and ahead of this week’s earnings from tech bellwethers including Meta and Microsoft.
“We saw a lot of buying yesterday, including from retail investors, which is supporting the market today,” he added.
The rise in ASML’s shares came after it reported stronger-than-expected orders of its most advanced chipmaking equipment.
Fouquet predicted that there would be more DeepSeek-style shocks in the coming months or years. “You cannot have an industry with this amount of opportunity without the key players being challenged,” the ASML chief executive said. “I don’t think you can define today who is the winner in 2030.”
He argued that new entrants such as DeepSeek would accelerate the rollout of the technology.
“Anyone that lowers costs is in fact a good news for us,” Fouquet said. “Because lower costs means AI can be used in more applications, more applications mean more chips. And we are in the business of providing equipment to people who make chips.”
Nvidia shares fell 2 per cent in pre-market trading on Wednesday. Futures markets pointed to a steady open for the Nasdaq and a 0.2 per cent decline for the S&P 500.
Earlier, Japan’s tech-heavy Nikkei 225 closed up 1 per cent, helped by a rebound in semiconductor stocks and AI investor SoftBank.
Asian market analysts at Goldman Sachs wrote in a note on Tuesday night that “oversold high-quality stocks could also provide some investment opportunities”, adding “we think strong companies will get even stronger”.
In Tokyo, Nvidia supplier Advantest closed up 4.4 per cent while semiconductor company Tokyo Electron was up 2.3 per cent. SoftBank ended the day with a 2.4 per cent rise.
However, analysts warned that the recovery had not yet fully undone the panicked falls on Monday as investors digested the implications of the heavy AI investment by US tech in light of DeepSeek’s achievements.
“There’s not been a rebound like ‘oh, it was nothing’. It is just a reflection that Monday’s move was a tad overdone,” said Mitul Kotecha, head of emerging markets macro and foreign exchange strategy at Barclays.