Trump Trade: President says China’s DeepSeek ‘a wake-up call’

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump with this daily recap compiled by The Fly:

DEEPSEEK: President Donald Trump said that the sudden rise of the Chinese artificial intelligence app DeepSeek “should be a wake-up call” for America’s tech companies as the runaway popularity of yet another Chinese app presented new questions for the administration and congressional leaders, CNBC’s David Ingram reports. Trump said he still expected U.S. tech companies to dominate artificial intelligence, but he acknowledged the challenge posed by DeepSeek, a low-cost AI assistant that rose to No. 1 on the Apple (AAPL) app store over the weekend. DeepSeek caused panic within U.S. tech companies and in the stock market because it has performed well in tests compared with competing AI models from Meta (META) and OpenAI, while it was developed at a much lower cost, according to the little-known Chinese startup behind it.

EXPANSION INTO FINANCIAL SERVICES: Trump Media and Technology (DJT) announced that the company’s board of directors has approved a financial services and financial technology strategy, which will include the launch of the financial services and FinTech brand Truth.Fi. “To diversify the company’s cash and cash-equivalent reserves of over $700 million as of December 31, 2024, the board has approved the investment of up to $250 million to be custodied by Charles Schwab (SCHW).

“In addition to traditional investment vehicles, these funds may be allocated to: Customized separately managed accounts; Customized exchange-traded funds; Bitcoin and similar cryptocurrencies or crypto-related securities. The SMAs will be developed in partnership with Charles Schwab, which would also broadly advise on TMTG’s Truth.Fi investments and strategy. An affiliate of Yorkville Advisors would serve as the Registered Investment Adviser for investment vehicles and financial products, which are expected to focus on investments in American growth, manufacturing, and energy companies as well as investments that strengthen the Patriot Economy,” the company stated. The company anticipates that Truth.Fi products and services, including multiple investment vehicles, will be rolled out in 2025 as new agreements are consummated, funding levels are determined, and any necessary approvals by financial regulators are secured, Trump Media noted.

STOCK CONSIDERATIONS: Mizuho upgraded Coinbase (COIN) to Neutral from Underperform with a price target of $290, up from $250. The firm’s analysis of bitcoin adoption growth points to further upside in bitcoin price over the medium-term. Bitcoin price and Coinbase shares are highly correlated, the firm tells investors in a research note. In addition, stablecoins are increasingly seen as a “disruptive force” in payments and U.S. dollar coin’s market capitalization is on an upward trajectory, contends Mizuho. The firm points out stablecoin revenue is 20% of Coinbase’s mix. The company’s Q4 and January volume trends are also pacing well ahead of expectations, according to Mizuho.

However, Coinbase shares are more expensive than Robinhood (HOOD), and its retail take rates “remain rich,” which could lead to price compression over time, the firm says, explaining why it didn’t upgrade the stock to Outperform. Further, the more friendly regulatory environment under President Trump and the presence of bitcoin exchange traded funds may increase Coinbase’s competition, Mizuho notes.