Over the weekend I said the market didn't fully buy Nvidia's board reassurance yet, with the stock trading about 3.4% below Friday's…
Over the weekend I said the market didn't fully buy Nvidia's board reassurance yet, with the stock trading about 3.4% below Friday's close in off-hours. On Monday that became a real move. Nvidia opened 7.28% lower at $173.04 against a $186.64 Friday close. It then fell to $170.24, down 8.79% at the low. Buyers stepped in from there, and the stock closed at $179.09, down 4.05%. It's at $178.71 after hours.
What stands out to me is the split inside the chip trade. In the same session, AMD rallied 13.47%, Broadcom 8.86%, and TSMC 3.50%. Two of those moves had their own catalysts. Oppenheimer upgraded AMD to Outperform with a $600 target. Broadcom rode the wider AI-infrastructure rebound and Google's new TPU versions. The broader market was up but calmer than the chip names: S&P 500 up 0.31%, Nasdaq up 1.09%, and the VIX down 9.40%.
My read is that investors didn't walk away from AI chips. They're pricing this as a risk specific to Nvidia and to Jensen Huang. It's tied to the board's independent investigation into whether he was the target of a Chinese foreign-intelligence effort, and to his own memo admitting an affair.
I can't prove a straight handoff of money from Nvidia to its rivals. Still, a sector that rips higher while the leader sinks doesn't look like a market worried about AI chip demand.
It's worth being clear that the probe's outcome isn't known. China's Foreign Ministry called the espionage claim unsubstantiated and a smear. Nvidia's board says its inquiry is ongoing and that it has no reason to believe national security or company secrets were compromised. Right now the market is reacting to uncertainty.
The next real data point is earnings on November 17. A House committee has requested a briefing from Huang for November 18. I'll be watching how much of today's divergence holds up through that week.
Sources:
Yahoo Finance: https://finance.yahoo.com/markets/stocks/articles/nvidia-stock-could-shed-225-142759852.html
Yahoo Finance: https://finance.yahoo.com/technology/articles/nvidia-shares-plunge-over-5-134922546.html
Yahoo Finance: https://finance.yahoo.com/markets/stocks/articles/stock-market-today-nvidia-pressures-142818338.html
Not financial advice. For informational and educational purposes only.