Chip manufacturers in Asia and Europe saw a resurgence on Wednesday, driven by strong earnings from the Dutch company ASML, which complemented a rally in leading chipmaker Nvidia. Nvidia’s stock rose by 9 percent on Tuesday, recovering some of the substantial $600 billion loss in market value it experienced earlier in the week amid concerns about competition from China’s DeepSeek, which is poised to create AI tools at significantly lower costs than its American counterparts. This situation has been described as a modern “Sputnik moment.”
Japan’s Nikkei 225 index, heavily weighted in technology stocks, increased by 1 percent, aided by gains in semiconductor shares and AI-focused SoftBank. The Stoxx Europe 600 index rose by 0.5 percent, with ASML’s earnings exceeding analyst projections, resulting in an 11.5 percent jump in its share price in Amsterdam. Additionally, Nvidia’s shares experienced a 0.6 percent uptick in pre-market trading on Wednesday.
Futures indicated a further positive trend in the US market, with contracts for the Nasdaq rising by 0.4 percent and those for the S&P 500 gaining 0.1 percent.
Market analysts noted that the latest developments in China regarding AI were being viewed with more calmness, suggesting that initial reactions may have been exaggerated. Analysts also pointed out that there might be potential for investments in high-quality stocks that have been oversold, predicting that strong companies could emerge even more robust.
In Tokyo, Nvidia supplier Advantest gained 4.4 percent, while semiconductor firm Tokyo Electron increased by 2.3 percent. SoftBank finished the day up 2.4 percent.
Wider Asian markets also performed well on Wednesday, with India’s Nifty 50 index climbing nearly 1 percent in afternoon trading and Australia’s ASX 200 rising by 0.6 percent. Meanwhile, markets in China, South Korea, and Taiwan were closed for lunar new year celebrations.
Despite the positive trends, analysts cautioned that the recent recovery does not completely negate the sharp declines observed earlier in the week as investors continued to assess the ramifications of significant AI investments by US technology firms in light of DeepSeek’s advancements. The rebound was recognized as a response to what some considered an overreaction on Monday rather than a sign of the initial concerns being unfounded.
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