Fund Rotation Shifts Toward Rivals
Jensen Huang's resignation as Nvidia CEO is seen by investors as potentially weakening the AI chip giant's long-term grip on the industry. U.S. financial media CNBC reported that Nvidia rivals AMD and Broadcom, as well as partner TSMC, could emerge as potential beneficiaries of the turmoil. Market observers noted that manufacturing capacity could be reallocated, and Nvidia's technological lead could narrow.
Franklin, Head of Asia Multi-Asset Solutions at Manulife Investment Management, said a wave of fund rotation is now flowing into other advanced chip designers, as markets expect it will give other players a chance to catch up. He stressed that amid uncertainty over Nvidia's leadership, Jensen Huang's departure could give rivals a chance to close the gap, and the rotation has already added momentum to gains in other semiconductor stocks.
Defensive Positioning Lifts Resilient Chip Stocks
Issam, Managing Director in the equities trading division at Mizuho Americas, said the shift is clearly visible, with investors turning to chipmakers less exposed to the turmoil over Nvidia's management. He told CNBC that TSMC, Broadcom, AMD and others will be winners from the upheaval because they are insulated from the management turmoil. Nvidia shares have plunged 11% this week, while AMD and Broadcom surged 30% and 24% respectively. TSMC, which manufactures Nvidia's most advanced processors, rose 11% over the same period, as TSMC stands to benefit whichever chip designer wins or loses. As investors adjusted AI holdings and avoided riskier names, TSMC also became a relatively resilient choice for those positive on the overall AI industry outlook. Issam noted that as investors adopt a more defensive stance, funds leaving Nvidia also flowed into less speculative areas, including analog chipmakers such as Texas Instruments, Analog Devices and Infineon. Texas Instruments rose about 13% this week, while Analog Devices and Germany's Infineon gained 12% and 14% respectively.
Supply Chain Advantage Faces Test
Dylan Patel, CEO of semiconductor research firm SemiAnalysis, said that beyond the immediate market reaction, Jensen Huang's resignation could fundamentally reshape the competitive landscape of the AI supply chain. He said Jensen Huang personally managed relationships with manufacturers and component suppliers, helping Nvidia secure scarce production capacity ahead of rivals. However, as companies such as Google and Amazon work to expand AI chip production, Nvidia's advantage could now come under pressure. Compared with Nvidia, the two hyperscale cloud providers have gradually made progress in securing supply-chain capacity, and without Jensen Huang's influence over suppliers, they could accelerate. He said if Nvidia cannot secure supply-chain resources, technology becomes its only competitive advantage, but without Jensen Huang, can Nvidia maintain its technological edge, given that Nvidia leads its largest rival by only one year and the gap is actually not large.