Big Tech may win again as Nvidia turmoil reshapes the AI trade
ETF experts say Nvidia's troubles and a Democratic Congress pushing back on data centers could leave Big Tech stronger, not weaker, as rivals such as AMD gain and existing computing power grows more valuable.
Big Tech could come out ahead
The largest technology stocks tied to the artificial intelligence trade could end up gaining the most from Nvidia's troubles and from a Democratic-controlled Congress pushing back on data centers, investing experts told CNBC's 'ETF Edge' this week.
'Big Tech may end up the winner once again, even as investors look for areas outside it,' said Dave Mazza, chief executive of Roundhill Investments, which manages the Magnificent Seven ETF.
Part of his case: other players in the AI trade stand ready to fill Nvidia's chip demand if investors lose trust in the company after a week in which its founder and chief executive Jensen Huang resigned. 'If people can't trust Nvidia, they will look for other sources for these chips, because they need them,' Mazza said.
A week that reshuffled the AI trade
The Roundhill Magnificent Seven ETF ended the week in the green, with a gain of less than 1%, while the Roundhill Neocloud ETF was up more than 1%. The Neocloud fund, which focuses on smaller cloud computing companies, remains deep in the red since its August 2026 launch, down 39%.
CoreWeave had its best day since April 2025 on Wednesday after its latest quarterly results, while Nebius shares sank after its Thursday report. CoreWeave shares sank again on Friday, and Nvidia posted its longest losing streak since 2012 after its latest weekly losses.
AMD finished trading this week up close to 13%, with Broadcom posting similar gains, and the tech-heavy Nasdaq index posted its best week since August. Nvidia finished the week at $162.85 a share.
Congress, data centers and Tuesday's test
The computing power that already exists could become even more valuable if Congress slows the data-center buildout after the Democratic Party's gains on Nov. 3 swept control of Congress, Mazza said. Dan Ives, partner at Yorkville Ives, estimates that 10% of planned data centers may not be built on the low end, and 15% to 20% on the high end, while demand still outstrips supply 4 to 1.
Nvidia's interim chief executive and chief financial officer Colette Kress will have her first chance to reassure the market when Nvidia reports third-quarter earnings next Tuesday. 'Our focus remains on serving our customers, partners, developers and shareholders,' Kress said in a statement issued on Thursday morning when the company announced Huang's exit.
Ives lowered his figure for Nvidia to $225 a share, from $300, while keeping a buy rating, and wrote that Nvidia remains the clear leader in graphics chips for the AI revolution, roughly 2 to 3 years ahead of the nearest competitor, with 42,000 employees driving the work. He called the valuation, at roughly 10 times expected 2028 earnings per share, far too low once Nvidia gets through the storm.
- 13%AMD's gain for the week, with Broadcom up a similar amount
- Less than 1%Weekly gain for the Magnificent Seven ETF
- 39%Neocloud ETF decline since its August 2026 launch
- $162.85Nvidia's closing share price for the week
- 10% to 20%Planned data centers that may not be built
- 4 to 1Demand for computing power versus supply
