Concerns over Apple’s weak first-quarter outlook have been partially offset by the emergence of DeepSeek, a Chinese AI startup, which could help accelerate iPhone upgrades and reignite growth. DeepSeek has demonstrated strong AI performance while operating on significantly lower costs and fewer advanced chips than its competitors.
While this development led to a sell-off in Nvidia, it has raised hopes for software firms and app developers. If AI-powered apps become more widespread, consumers may be more inclined to purchase AI-enabled smartphones, potentially benefiting Apple.
Apple’s stock has risen 7.4% this week, outperforming the Nasdaq 100, though it remains down 4.4% in 2025. Investor sentiment had been dampened by weak iPhone demand, China-related economic concerns, and trade tariff uncertainties, leading to several analyst downgrades. The company’s stock valuation remains high despite its revenue growth lagging behind the broader tech sector.
Some investors remain skeptical about Apple’s AI strategy, as the company has not heavily invested in AI infrastructure compared to its rivals. However, Apple is still seen as a financially stable company with strong brand loyalty and a sizable share buyback program.
For now, the potential boost from DeepSeek remains speculative, but if significant AI applications emerge, Apple could see long-term benefits. Without that breakthrough, however, its current valuation may be difficult to justify.