Europe midday: Stoxx shrugs off AI meltdown to hit record high

(Sharecast News) - European stocks shrugged off the tech-stock meltdown overnight and hit record intra-day highs on Tuesday after China's DeepSeek frightened the life out of investors with its announcement of a free artificial intelligence model to challenge bigger rivals. The pan-regional Stoxx 600 index was up 0.62% at 532.98 having hit 533.66 at one stage. All major bourses were in the green.

DeepSeek's claim on Monday to have a low-cost open-source language model sent shockwaves through markets overnight, hammering the tech-heavy US Nasdaq index and wiping $600bn off the value of new market darling Nvidia, which makes AI computer chips. It was the largest one-day battering of a company in US history.

"Companies in the semiconductor industry have borne the brunt of the sell-off as the emergence of a new AI model from Chinese startup DeepSeek, reportedly developed on a shoestring budget of under $6m, raised concerns about the outlook for spending on cloud infrastructure," said Hargreaves Lansdown analyst Derren Nathan.

"Other big semiconductor names caught in the crossfire include custom chip designer Broadcom and memory specialist Micron. Outside of the US, stocks that have taken a hit range from Taiwan Semiconductor Manufacturing Company through to the Dutch builder of chip printing machines ASML."

"But that only tells one side of the story. For those looking to integrate AI into their business models the prospect of lower development costs could seriously boost returns on investment."

In equity news Germany's SAP fell slightly despite a better-than expected 25% increase in annual adjusted operating profit.

Industrial and electrical products distributor RS Group slumped after reporting that full-year profit would be at the bottom end of guidance after third-quarter revenues fell 3% due to declining output and falling business confidence among European customers.

Life sciences company Sartorius surged after better-than-expected fourth-quarter earnings as well as strong bioprocess solutions orders.

Siemens Energy rose as the offshore wind turbine maker reported a preliminary first-quarter revenue above market expectations.

Reporting by Frank Prenesti for Sharecast.com