(Bloomberg) — The rout in US stocks to start the week, spurred by questions over artificial-intelligence spending, has done little to shake Steve Cohen’s confidence in the technology’s transformative potential.
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The billionaire founder of Point72 Asset Management says the creation of Chinese startup DeepSeek could help accelerate AI development even as investors worry that the firm’s platform has upended Wall Street’s assumptions about the buildout of the technology.
“Our view is what happened with DeepSeek is actually bullish because it advances the move to artificial super-intelligence,” Cohen said Tuesday at the iConnections Global Alts conference in Miami Beach. “And that’s coming, it’s coming quick.”
US equities rebounded on Tuesday after technology stocks slumped the day before on fears that big US companies have poured too much money into developing AI given DeepSeek’s low-cost approach. The Nasdaq 100 Index gained 1.6%, while chipmaker Nvidia Corp. jumped around 9%, retracing some of the prior day’s slide, the single largest value loss in history.
Cohen said AI is a 10- to 20-year theme that investors would be remiss to ignore.
Point72 has been raising money for a new stock-picking hedge fund focused on artificial intelligence, Bloomberg News reported. The plan was for the fund to bet on and against AI hardware and semiconductor companies globally.
“This is such a dramatic and important shift that to ignore is a mistake,” Cohen said Tuesday. “Because of what I believe this investment could be, why not set up a separate entity that invests with a little bit more timeframe and duration?”
While the hedge fund manager and owner of Major League Baseball’s New York Mets is bullish on AI in the long-term, he sees turbulence ahead for the stock market as he expects economic growth will slow and inflation will remain sticky.
“I don’t think that’s a great backdrop in 2025,” he said. “I would expect the markets to top over the next couple months if it hasn’t already topped already, and I would expect the second half to be a little tougher.”
The next big hurdle for financial markets is a slew of Big Tech earnings. The so-called Magnificent Seven companies are on deck to kick off earnings Wednesday with Microsoft Corp., Meta Platforms Inc. and Tesla Inc. reporting. Federal Reserve officials will also meet and are expected to hold interest rates steady while offering clues on the trajectory for borrowing costs and inflation.
Cohen stepped away from trading for Point72 Asset Management last year but remains the firm’s co-chief investment officer.
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