Artificial intelligence (AI) investing experienced a shakeup at the end of January with the release of DeepSeek’s R1 model. This model was reported to have been trained far more cheaply than its U.S. counterparts and performed similarly in some areas. This caused a short-term panic in some AI stocks, but some have recovered.
Still, I think the AI investing realm has some great stocks to buy, and the DeepSeek breakthrough shouldn’t be seen as a showstopper. Instead, it should be viewed as a catalyst. Here’s a look at three stocks to consider in February.
Nvidia (NASDAQ: NVDA) was one of the hardest-hit AI stocks after the DeepSeek announcement, because everyone assumed that companies wouldn’t need as many high-powered graphics processing units (GPUs) from Nvidia. However, I think that’s the wrong way of looking at it.
DeepSeek used Nvidia H800 GPUs because of U.S. export restrictions to China. As a result, it was forced to use these GPUs more efficiently than its U.S. counterparts. However, efficiency isn’t the goal of the U.S. AI companies (although DeepSeek’s breakthroughs will undoubtedly be incorporated). Instead, U.S. AI firms are going for the most powerful model, which requires loads of Nvidia GPUs to train.
This direction hasn’t changed, making this dip in Nvidia’s stock a strong buying opportunity. Nvidia is still projected to have a fantastic 2026 fiscal year, with revenue growth of 52% expected. After the sell-off, the stock trades for just 27 times forward earnings, making it a reasonably priced big tech stock. This sale won’t last forever, and I’d suggest investors take advantage of it before Nvidia reports fourth-quarter FY 2025 results later this month.
Meta Platforms (NASDAQ: META) also sold off following the DeepSeek release, but quickly recovered thanks to incredibly strong Q4 results. Meta is the parent company of dominant social media sites like Facebook, Instagram, WhatsApp, Threads, and Messenger, and it derives nearly all its revenue from advertising. Ad revenue increased 21% in Q4, which dramatically boosted Meta’s profits….
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