DeepSeek’s AI Disruption Shakes the Tech Industry

The emergence of Chinese AI startup DeepSeek has sent shockwaves through the tech sector, triggering a major selloff in Nvidia stock. However, some analysts believe DeepSeek’s cost-efficient AI models could benefit companies like Apple, fueling a long-anticipated iPhone upgrade cycle.

Could AI Drive Apple’s iPhone Growth?

DeepSeek’s AI has demonstrated strong performance with significantly lower costs and fewer chips than competitors. While this initially rattled tech stocks, analysts see potential for AI-driven innovation in mobile applications. If new AI-powered apps gain traction, they could drive consumer demand for next-generation iPhones.

Apple’s Stock Gains Amid AI Speculation

Apple’s stock rose 0.3% on Thursday, marking its biggest four-day gain since June. Despite this, shares are still down 4.3% in 2025, underperforming other tech giants. The company surged 30% last year on expectations of an AI-powered iPhone but has struggled to deliver significant revenue growth.

Valuation Concerns and Investor Skepticism

Apple trades at nearly 32 times estimated earnings, more than 50% above its 10-year average. This high valuation persists despite revenue growth being negative in five of the past eight quarters. Analysts forecast Apple’s revenue to grow 5.2% in 2025, well below the tech sector’s projected 12.2% growth rate.

AI Adoption vs. Growth Expectations

Apple’s cautious approach to AI contrasts with peers like Microsoft, which invests heavily in infrastructure. Investors remain hopeful that AI advancements, including DeepSeek’s technology, could create new opportunities for Apple. However, many are waiting for tangible signs of AI-driven growth before adjusting their outlook.

Will DeepSeek’s AI Spark an iPhone Upgrade Cycle?

While DeepSeek’s AI breakthrough is generating optimism, it remains uncertain whether it will directly translate into stronger iPhone sales. The potential for AI-driven apps to accelerate hardware demand exists, but until consumer behavior shifts, analysts remain cautious about Apple’s long-term growth prospects.