As Nvidia reels, AMD, Broadcom and TSMC are the early winners
Money is rotating out of Nvidia and into its rivals: AMD is up 30% this week, Broadcom 24% and TSMC 11%, as investors bet Huang's exit lets competitors close the gap.
The rotation out of Nvidia
Investors are rotating out of Nvidia and into its rivals. So far this week, Advanced Micro Devices is up 30%, Broadcom is up 24% and Taiwan Semiconductor Manufacturing Company is up 11%, while Nvidia is down 11%, CNBC reported. On Thursday alone, AMD and Broadcom each rose about 6%, according to Reuters.
The shift extends beyond the big chip designers. Texas Instruments is up 13% this week, Analog Devices 12% and Germany's Infineon 14%, as some investors move toward analog chipmakers seen as less exposed to the AI spending cycle.
Why rivals stand to gain
Mark Franklin, head of multi-asset solutions for Asia at Manulife Investment Management, said the market was rotating into other advanced chip design companies on the assumption that they can now catch up. Farzin Azam, managing director of equities trading at Mizuho Americas, said TSMC, Broadcom and AMD stood to come out as winners because they do not carry Nvidia's management disruption.
Dylan Patel, chief executive of SemiAnalysis, pointed to the supply chain. Huang personally cultivated supplier relationships that secured scarce production capacity ahead of rivals, Patel said, and Google and Amazon, which build their own AI chips, were already gaining ground on supply-chain capacity against Nvidia and could now move faster. The technology lead is only about a year, Patel added, so the gap is not massive.
- AMD this weekUp 30%
- Broadcom this weekUp 24%
- TSMC this weekUp 11%
- Nvidia this weekDown 11%
TSMC wins either way
TSMC, which manufactures chips for Nvidia and its rivals alike, benefits whichever designer gains ground, and is seen as a relatively safer way to invest in AI. Major technology companies are projecting higher AI spending in 2027, with further increases possible in 2028, CNBC reported.
Franklin also raised a longer-term question: whether competition and open-source technology eventually make AI hardware a commodity, pressuring chip prices and returns. Azam said Nvidia looked inexpensive relative to its earnings-growth prospects, but added that the investigations and management uncertainty could limit a sustained recovery. He expects earnings due November 17 to remain strong, with investors focused on management's plans for navigating the crisis.
