Nvidia turmoil triggers chip stock rotation, with funds shifting to AMD, Broadcom and TSMC
Nvidia’s turmoil is prompting a rotation across chip stocks. Here's what we know
Nvidia is in turmoil after Jensen Huang's resignation, following revelations of multiple extramarital affairs, including with a woman regarded by the U.S. intelligence community as a Chinese spy. Investors are betting that his departure will loosen Nvidia's grip on the industry; this week Nvidia shares fell 11% cumulatively, while AMD and Broadcom rose 30% and 24% respectively, and TSMC, which manufactures its most advanced processors, rose 11%. Dylan Patel of SemiAnalysis said that Huang personally maintaining supplier relationships helped Nvidia lock in scarce capacity; Google and Amazon were already competing for supply chain capacity and may accelerate now that Huang's influence over suppliers is gone, and Nvidia's lead over its largest competitor is only about one year.
The report reviews capital rotation data in chip stocks and analyst judgments after Jensen Huang's resignation, providing background for observing supply chain opportunities for Nvidia's competitors.