The share price of Delta Electronics (Thailand) Public Company Limited (SET: DELTA) settled lower on Monday with a sharp drop of THB9.00 or 6.12% to THB138.00 per share amid tech selloff.
The selloff in DELTA has an impact by nearly 9 index points on the SET Index, Thailand’s bourse, that experienced a drop by 13.13 points today at the closing,
InnovestX Securities Company Limited stated that the drop in DELTA today was primarily due to concerns about NVIDIA’s potential revenue decline. This drop stems from China’s large language model, DeepSeek, which can process as efficiently, or even more effectively, than ChatGPT, but at significantly lower costs.
Additionally, alternative hardware options such as TPUs, ASICs, or customized cloud systems optimized for such models could further reduce costs compared to OpenAI’s reliance on NVIDIA GPUs.
The securities firm recommended Underperform for DELTA, with a target price of THB103. There is anticipation that the 4Q24 earnings, set to be announced on February 14, 2025, might fall below the research team’s prior estimate of THB6.4 billion. This is attributed to weaker-than-expected performance in EV-related products. Additionally, the gross margin is projected to decline and may not reach the high levels recorded in 2Q24 and 3Q24, which stood at 24.60%.
DeepSeek is a Chinese startup founded by Liang Wenfeng, a hedge fund manager and a prominent figure in China’s AI industry. DeepSeek was launched in May 2023, and its flagship product, the R1 model, has gained significant attention. The R1 model specializes in reasoning tasks and is considered a key competitor to OpenAI’s o1 model.
