Jim Cramer says AI stocks are climbing as DeepSeek threat recedes on Wall Street

Core Viewpoint - The market appears to have regained confidence in AI stocks, dismissing concerns over the potential competition from Chinese startup DeepSeek, as major tech companies continue to perform well [1][4]. Group 1: Market Performance - The Dow Jones Industrial Average increased by 1.19%, the S&P 500 rose by 1.11%, and the Nasdaq Composite advanced by 1.43% on Monday [2]. - Semiconductor stocks showed strong performance, with Broadcom rising by 3.94%, Nvidia increasing by 2.59%, and Advanced Micro Devices gaining 6.83% [2]. - The Nasdaq 100 reached a new all-time closing high, finishing up 1.53% [2]. Group 2: DeepSeek's Impact - DeepSeek's AI model, released in January, initially caused panic among investors due to its advanced capabilities and lower operational costs, leading to significant stock declines in major tech companies [3]. - Nvidia experienced a dramatic drop of 17% in one session, resulting in a loss of nearly $600 billion in market capitalization, marking the largest single-day drop for a U.S. company [3]. - Cramer suggests that the recovery of AI stocks indicates that fears regarding DeepSeek's dominance were overblown and that the situation reflects common investor mistakes [4]. Group 3: Investor Sentiment - The recent rally in AI stocks is seen as a refutation of the belief that China has surpassed the U.S. in the AI sector [4]. - Cramer emphasizes that many investors did not critically assess DeepSeek's claims, despite warnings from experts about potentially misleading data [4]. - The overall sentiment is that the tech stocks should not have been sold off in the first place, as DeepSeek's impact was not as significant as initially feared [5].