By Stuart Condie
SYDNEY--DigiCo shares are on course for their lowest close since the Australian data-center operator and developer's December listing, after Chinese artificial-intelligence startup DeepSeek sparked a selloff of global AI-related stocks.
The company's equity was valued at almost 2.75 billion Australian dollars, equivalent to US$1.73 billion, when it listed on the Australian Securities Exchange. On Tuesday, the stock was down 11% at A$4.245, or 15% lower than its A$5.00-per-share value at the initial public offering.
The slump came hours after investors offloaded shares of U.S. chip-makers and other AI-related companies amid concerns that the development of cheaper models such as DeepSeek could mean that demand will not be as large as previously anticipated.
Data centers, such as the 13 that are operated or in development by DigiCo, are necessary to house the computing power behind artificial intelligence.
Australia-listed shares in rival data-center operator NextDC were also trading lower on Tuesday, down by 5.9%.
UBS analysts initiated coverage of DigiCo on Tuesday with a buy rating. In a note written before DeepSeek's announcement of its low-cost model, they pointed to likely data-center demand from AI.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
January 27, 2025 21:14 ET (02:14 GMT)
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