DeepSeek will create ‘faster unlock’ of chip demand, says JPMorgan

JPMorgan analyst Harlan Sur believes the recent efficiency gains demonstrated by DeepSeek will serve to pull forward the adoption and scaling curve for inferencing and create a “faster unlock” of demand for higher performance artificial intelligence semiconductor solutions. The firm says that following the launch of DeepSeek R1 last week, investors have expressed concerns regarding the intermediate and long-term implications for AI semiconductor spending given the company’s claims regarding its compute efficiency. However, as cloud providers and hyperscalers continue to build larger training and inferencing cluster sizes, the trend will benefit custom application-specific integrated circuit suppliers like Broadcom (AVGO) and Marvell (MRVL), given their cost and power performance advantages, the analyst tells investors in a research note. “The bottom line is that innovation does not stop; it catalyzes new opportunities,” contends JPMorgan. It reiterates Overweight ratings on Broadcom, Marvell, and Nvidia (NVDA).