Nvidia’s Leadership Shake‑Up Sparks Rally for AMD and Broadcom as AI Trade Realigns

For three years, Wall Street rode the artificial intelligence boom through a single ticker. This week, investors began shifting to alternative chips as leadership uncertainty unfolded.

Nvidia Corp. founder Jensen Huang stepped down as CEO and board member on Thursday following a board investigation into reports of a foreign intelligence targeting. Chief Financial Officer Colette Kress has been named interim CEO.

Capital did not exit the semiconductor sector; it simply moved to other players.

AMD and Broadcom emerged as the top two performers in the S&P 100 this week, whereas Nvidia ranked among the three worst stocks in the broader S&P 500.

Huang’s Exit Breaks the AI Trade’s Center of Gravity

Nvidia stock hovered around $162 on Friday, marking a roughly 13% decline from its previous week close of $186.64. The shares were on pace for a sixth consecutive weekly loss—a streak the stock had experienced only four prior times, in 2002, 2008 and twice in 2012.

No relief arrived on Friday. A Bloomberg report revealed that 22 Dell Technologies servers equipped with restricted Nvidia H800 chips had been placed in a Shanghai data center linked to a firm founded by Alice Huang. Dell’s shares dropped more than 8%.

HSBC downgraded Nvidia to Hold and cut its price target to $170 from $365. The firm maintained its fiscal 2028 earnings outlook but noted the stock now trades at an 11‑times forward earnings multiple—the lowest in 15 years.

“We believe the uncertainties will prevail until a permanent succession plan is laid out and the new CEO is able to demonstrate execution capabilities,” said Frank Lee, global head of tech hardware and semiconductor research at HSBC.

Chart of the Week: Broadcom’s Best Week Ever Against Nvidia

Broadcom is wrapping up its best week ever against Nvidia. The Broadcom‑to‑Nvidia price ratio jumped 35.4% this week, the biggest weekly gain in data going back to Broadcom’s 2009 listing. The previous record, nearly 33%, came in the week ended Dec. 13, 2024, after Broadcom’s earnings.

Broadcom-to-Nvidia price ratio, weekly percentage change since 2009. Source: TradingView

AMD and Broadcom Grab the Crown

AMD was the S&P 100’s top performer, up about 18% for the week near $531.

AMD surged from $404.40 on Nov. 5 to $585.30 on Thursday—a near 45% gain in just five sessions—as investors anticipated that Nvidia’s leadership uncertainty would drive customers toward its chief competitor. Over the same period, the Nvidia‑to‑AMD price ratio fell almost 37%, marking its sharpest five‑day decline since August 2002.

Friday delivered a reality check, with AMD slipping about 9%—its worst session since Nov. 5—and wiping out roughly a third of the prior rally. Nonetheless, AMD’s year‑to‑date gain stands at 142%, while Nvidia’s shares have declined about 15%.

Broadcom mirrored the strength, climbing nearly 18% from last Friday’s close of $293.69 to around $345—its best weekly performance since early April.

Broadcom jumped 8.8% on Monday as chipmakers rebounded, added another 5.5% on Thursday when Huang departed, and retreated about 5% on Friday after Rothschild & Co. downgraded the stock to Neutral from Buy and cut its price target to $398 from $595.

Arista Networks rounded out the podium, gaining roughly 15% for the week as the AI networking sector participated in the rotation away from Nvidia.

The broader market remained resilient; by Friday afternoon the S&P 500 was up about 2.4% for the week near 7,550, and the Nasdaq 100 was up about 3.5% near 27,930, despite a 1.3% decline on Friday.

The VanEck Semiconductor ETF (SMH), which holds Nvidia, AMD and Broadcom among its largest holdings, rose about 2% for the week, masking a sharp internal rotation within the fund.

Hot Inflation Puts a Fed Hike in Play

U.S. consumer prices rose 0.4% in October, exceeding the 0.3% forecast, while core inflation climbed 0.3%, above the expected 0.2%, according to data released Tuesday.

Fed Governor Christopher Waller signaled a hawkish stance, stating, “I believe a 50‑basis‑point hike in the policy rate should be considered at the December meeting.”

Friday’s producer price index showed a modest easing, with wholesale prices rising 0.3% in October—below the 0.4% forecast—while annual producer inflation hit 6.5%, the highest level since November 2022.

Bank of America now projects three consecutive rate increases, in December, January and March, pushing the federal funds rate to a range of 4.5%‑4.75%.

“After the October CPI data, the Fed appears further behind the curve on inflation. It no longer has the luxury of hiking at a quarterly pace,” said Bank of America economist Aditya Bhave.

According to Bhave, markets are now pricing roughly 50 basis points of hikes over the next two Federal Reserve meetings.

Bond yields climbed, with the 10‑year Treasury yield rising to 5.15%—its highest since mid‑October and up about 29 basis points from the previous week. The 30‑year yield advanced to 5.48%, while the 2‑year yield held near 4.87%.

Higher yields pressured interest‑free assets; gold fell about 5% for the week to $3,879 an ounce, while Bitcoin dropped roughly 9% and slipped below $70,000.

Nvidia Without Huang

Next week the focus will shift from who sold Nvidia to what Nvidia has to say.

The chipmaker is scheduled to report fiscal third‑quarter results on Tuesday, Nov. 17, followed by its first earnings call without Huang at the helm.

According to Benzinga Pro data, options traders are pricing an implied move of 9.1% in Nvidia stock after the report.

For AMD and Broadcom, this week was a coronation. Tuesday’s earnings will reveal whether the shift was a transfer of business or merely a change in sentiment.

Photo: Shutterstock

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