China AI narratives affect Dow Jones constituents: Apple stock rises as Nvidia sheds weight

• Apple CEO Tim Cook is visiting China this week.
• Cook has positive things to say about China's Deepseek.
• Alibaba's Chairman worries that the US is entering an AI bubble.
• NVDA stock has fallen into a bearish Death Cross on the daily chart.

 

The United States (US) stock market is once again churning tepidly higher on Tuesday as investors hope that the Trump administration’s Liberation Day, scheduled for April 2, will mean more targeted and digestible tariffs than initially anticipated.

As part of the waiting period on Tuesday, China has filled the headlines on several different levels, imparting movement on two major Dow Jones Industrial Average (DJIA) stocks: Apple (AAPL) and Nvidia (NVDA).

Apple made headlines on Monday when CEO Tim Cook praised China’s AI chatbot Deepseek. Apple stock then gained more than 1% on Tuesday, when Tim Cook announced that a popular Chinese video game is coming to the Mac this week.

Meanwhile, Nvidia stock has shed some recent gains on Tuesday after Alibaba (BABA) raised concerns that the US was in an AI bubble.

The Dow Jones saw early gains in the Tuesday session collapse around lunchtime in New York and now trades largely even at the time of writing. The NASDAQ still holds onto a 0.3% advance.

Nvidia, Apple stock news

Apple’s Tim Cook wrote on his Weibo account on Tuesday that the popular role-playing game Wuthering Waves will be coming to the Mac ecosystem. 

“Wuthering Waves is coming to Mac on Thursday! Thanks Kuro Games for sharing how you use Apple technologies to deliver incredibly immersive experiences for gamers everywhere!", Cook wrote during the third day of his China trip.

Posted to Tim Cook's Weibo account on March 25, 2025

It was one of many positive advertisements Cook made during his multi-day trip. Chinese media highlighted Cook’s praise of the artificial intelligence lab DeepSeek, which produced a cheaper AI chatbot that worried some US AI executives back in January. He referred to their AI models as “excellent”.

Many observers think an AI partnership is in the works between Deepseek and Apple. In late January, Alibaba released its own in-house AI platform Qwen 2.5-Max, which it claims surpasses Deepseek’s third version. However, Alibaba was forced to drastically cut prices on its AI products due to Deepseek’s much cheaper option, which is open-source.

Despite announcing a $52 billion long-term investment in AI technology, an Alibaba official on Tuesday threw cold water on the US vision for AI. Alibaba Chairman Joe Tsai said he viewed recent news of heavy US investment in AI as “the beginning of some kind of bubble.”

"People are talking about $500 billion [in reference to the Trump administration’s announced partnership with OpenAI and Softbank], several hundred billion dollars,” said Tsai at a Hong Kong investment conference. “I don't think that's entirely necessary. I think in a way, people are investing ahead of the demand that they're seeing today.”

Any major pullback in spending on AI infrastructure would likely upend Nvidia’s current valuation as much of it depends on the AI supercycle continuing at a rapid pace.

Apple, Nvidia stock charts

Nvidia stock's daily chart should worry investors as it has only just entered a dreaded Death Cross pattern. This is when the 50-day (blue) Simple Moving Average (SMA) crossed below the 200-day SMA. Typically, this is a strong bearish signal that an extended downtrend lies ahead.

If support at $105 fails to support NVDA stock as it did in mid-March, then shares could quickly drop to $92. That level held up during the August 5, 2024 crash.

NVDA daily stock chart

Apple stock has not yet crossed into a Death Cross, but the 50-day and 200-day SMAs are clearly moving toward parity. Apple found support over the past two weeks near $210, but a break there could send shares hurtling toward the $196 or even $180 supports.

Morgan Stanley said in a recent investor note that Apple is somewhat insulated from an AI downturn since it is not dependent on the industry, but the analysts did suggest that Apple stock is expensive enough to move lower in a general market sell-off that affected other AI stocks.

AAPL daily stock chart