In recent weeks, the A-share market in China has witnessed a remarkable surge, primarily fueled by the buzz surrounding DeepSeek, a new concept making waves in the artificial intelligence (AI) sectorFebruary 5th marked a significant moment for investors, with DeepSeek stocks leading the charge, driving several tech stocks to reach their daily limit, and sparking broader interest in the computer software sector.

The first trading day after the Lunar New Year saw DeepSeek stocks soar, with key players like Parallel Technology and Meiri Interaction hitting their upper limitsThis uptrend reflected a vivid display of market enthusiasm for AI-driven investments, as exchange-traded funds (ETFs) focused on software services were also nearing their limit up thresholds.

Market analysts noted a surge in curiosity among Chinese fund managers, many of whom expressed optimism about DeepSeek's potential to ignite a new wave of AI-driven innovation

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Observers contend that DeepSeek could catalyze a reevaluation of asset valuations in the tech space, positioning it as a pivotal investment opportunity heading into 2025.

Specifically, the data revealed that top-performers within the Wind's popular concept index, dedicated to DeepSeek collaborations, skyrocketed nearly 14%, with a total trading volume surpassing 31.1 billion yuan on the same dayNotably, stocks from firms such as iFLYTEK and Inspur Information emerged as heavyweight components of this index, asserting themselves as part of the broader market shift towards AI technologies.

Moreover, this surge in the DeepSeek concept has catalyzed a broader uptrend across the computer software sector, with various theme-based ETFs, like the WanJia and E Fund’s software service ETFs, demonstrating gains exceeding 8%. Such performance underscores the profound market impact of emerging AI solutions.

On the corporate front, recent announcements regarding DeepSeek models’ deployment resonate with the soaring market sentiment

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Huawei’s official channels revealed the launch of multiple versions of DeepSeek models, underscoring their applicability in diverse technological scenarios, aimed at enhancing cloud servicesThis technological leap reflects a strategic move to blend public and private cloud scenarios effectively.

As momentum builds around DeepSeek, it has drawn attention from a multitude of investment firmsFund managers are reassessing China's capabilities in the AI domain, and several managers have noted that DeepSeek’s emergence signals a shift where China’s AI technologies align more closely with their American counterparts.

Particularly for fund managers, stock-picking strategies have come into focus as they navigate this new landscapeKey firms, such as Noan Fund, have signaled their interest in prominent stocks like iFLYTEK, Inspur, and Zhongke Shuguang, which have recently seen substantial institutional holdings

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For instance, iFLYTEK alone counted 179 funds among its investors last quarter, while Inspur garnered attention from 113 funds, indicating strong institutional belief in these companies’ futures.

Moreover, with rising enthusiasm for DeepSeek, diverse strategies are being employed by fund managersChen Yanpeng from Noan Fund notes that while the market shares a similar short-term sentiment, stock selection should focus on companies demonstrating practical breakthroughs, especially in sectors where DeepSeek excels—finance, healthcare, and software development.

Meanwhile, the insights from investment experts highlight the potential longitudinal effects of DeepSeek on the marketThe digital economy fund manager at Morgan Stanley, Lei Zhiyong, emphasizes the importance of DeepSeek’s sustained relevance, hinging on its ability to foster commercial applications in AI software and the integration of hardware solutions in a business context.

Despite the cautious economic outlook affecting technology stocks, experts like Liu Zhongteng from Golden Eagle Fund argue that AI and self-sufficiency innovations can drive significant new opportunities

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With a focus on manageable infrastructure costs and robust AI capabilities, the prospects for DeepSeek resonate loudly amongst investment strategists forecasting potential returns in 2025.

Fund managers suggest that future catalysts, such as product iterations from cloud service giants and upcoming DeepSeek model releases, may further shape market dynamicsThe launch of varying iterations of the DeepSeek model, particularly in 2024 and 2025, is anticipated to reinforce its market position.

As the global landscape evolves, DeepSeek represents a pivotal component in redefining traditional tech asset valuationsEarly adopters of the technology are already benefiting from its unique advantages, and significant investments could spur widespread adoption across diverse sectors, enhancing productivity and innovation.

Analysts posit that the future path of DeepSeek could provide alternative routes to chip technology development within China, leveraging unique innovations outside the paradigm established by leading American firms