The GraniteShares 2x Long PLTR Daily ETF, which tracks Palantir Technologies, is experiencing significant price movement due to a broader selloff in the technology sector. The catalyst for this downturn is the emergence of a competitive artificial intelligence model from China's DeepSeek, which has raised concerns about the sustainability of high valuations in U.S. tech stocks. DeepSeek's AI model, reportedly developed at a fraction of the cost of its American counterparts, has led to a reevaluation of the AI investment landscape, causing a ripple effect across the market. This development has particularly impacted companies heavily invested in AI infrastructure, including Palantir, as investors reassess the competitive dynamics in the sector.
The U.S. stock market opened sharply lower on January 27, 2025, with the Nasdaq Composite dropping 3.6% shortly after the market opened. This decline was driven by fears that DeepSeek's advancements could undermine the dominance of U.S. tech giants in the AI space. The selloff was exacerbated by concerns over high valuations, as highlighted by analysts questioning the long-term profitability of substantial investments in AI. The broader market sentiment was further dampened by the anticipation of upcoming earnings reports from major tech companies, which could provide additional insights into the sector's resilience in the face of new competition.
The GraniteShares 2x Long PLTR Daily ETF fell to $128.70, down 7.29% as of 10:00 AM ET on January 27th.