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Some national mastheads nourishing the great minds of this sunkissed country have on Thursday reported a bounceback in ASX tech stocks following an overnight boost to the share prices of Meta and Tesla.
Except, that isn’t really the whole story.
The bounceback in question, of course, refers to the ancient history of two days ago when the DeepSeek scare rattled American markets as Australia slept gently then came for the ASX.
That phenomenon was enough to push down Australian data centre giant NextDC, its counterpart Goodman Group, and the recently-listed data centre property stock Digico Infrastructure REIT.
When it comes to Australia, those are kind of the three that matter. And whether or not Digico matters, per you the reader’s philosophy, depends on how much you care about a REIT leveraging a macroeconomic trend. (At least they aren’t mining for antimony.)
But so far, the threat to tech stock valuations (and thus global market valuations) posed by the left-of-field breakthrough from China that is DeepSeek– not its first big breakthrough this year – remains very present.
If only OpenAI had to release earnings reports. For some reason on Tuesday, market favourite (among the fatally optimistic) Brainchip also fell -16%, despite only being at the ‘concept’ stage of having anything to do with AI. But whatever, it has ‘chip’ in the name.
And maybe that’s a good place to start.
So far, Brainchip remains down -15% week on week. When you go back to the big three data centre stocks I mentioned (if you agree with my bundling of them as so), it’s a similar story. Gains so far have been minor.
The critic could say, “It’s only been two days,” and that’s correct – but what I find most interesting to realise next week is whether or not the DeepSeek scare will push up short interest in NextDC and Goodman Group.
Short seller data comes with a delay for the everyday trader and so it’s all just speculation, really, until a few days clear through the system. But one has to think if anyone was going to short an Australian data centre stock, it would probably be right around now.
Even if that happens, there’s no guarantee the market will react with caution. While short sellers can put companies like Droneshield and Cettire underground, NextDC and Goodman Group are more tapped into macroeconomic certainty.
As far, of course, as anyone can tell. But it’s still early days.
In only kind of tangentially related matters, we also get Apple’s earnings report this evening. That could give us some insight into how iPhone 16 sales are going – so far, they’ve been very poor.
Very poor sales of a phone wherein the entire selling point was the fact it had an onboard AI chatbot. The question remains firmly valid in my mind whether it’s even a safe bet to say that the everyday person wants AI.
The only real way it’s changed the world so far is that now Google search results have gotten worse, as far as two years ago we didn’t need to worry if the results we got were accurate, just how many of them were ads.
But I don’t hate the economy, and I don’t hate the stock market. May the NASDAQ continue to rise. Still, food for thought.
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