AMD and Broadcom stocks fell around 2% in Friday’s pre-market trading, giving back part of Thursday’s rally as investors tentatively returned to Nvidia following Jensen Huang’s resignation.
Nvidia gained about 2.5% before the opening bell after falling 4.34% to $166.19 on Thursday. AMD had surged 5.86% to $585.30, while Broadcom climbed 5.54% to $364.36 in that session.
The reversal shows how quickly Wall Street is reassessing its bets on artificial intelligence chips.
Nvidia stock rebounds as investors reconsider Thursday’s trade
The initial rush into AMD and Broadcom followed Huang’s abrupt departure and the appointment of Nvidia finance chief Colette Kress as interim chief executive.
Investors questioned whether new management would preserve Huang’s ambitious product strategy and close relationships with major customers.
That uncertainty made competing chipmakers attractive, particularly after Nvidia’s sharp decline.
Friday’s recovery may reflect bargain hunting, while the pullback in AMD and Broadcom could involve profit-taking after substantial gains earlier in the week.
“The market appears to be distinguishing between a problem for Nvidia and a problem for AI,” Pepperstone research head Chris Weston told ABC News on Thursday.
His distinction matters, as companies can redirect investment towards alternative chip suppliers without abandoning plans for data centres or AI applications.
Equally, buying shares in an Nvidia competitor takes seconds. Changing an established computing platform can involve lengthy technical testing, software changes and contract negotiations.
AMD and Broadcom still have powerful growth drivers
AMD challenges Nvidia more directly through its Instinct AI accelerators and server processors. Its third-quarter revenue rose 45% to $13.4 billion, while Data Center sales jumped 97% to a record $8.5 billion.
William Blair analyst Sebastien Naji upgraded AMD to Outperform on Thursday, according to TipRanks.
He cited Nvidia’s leadership uncertainty, Intel’s supply problems and improving prospects for AMD’s next generation of AI systems.
Broadcom has a different business model. It supplies custom accelerators and networking technology to cloud operators developing their own computing infrastructure.
Its fiscal third-quarter AI semiconductor revenue reached $16.7 billion, up 221% from a year earlier. Management expects that figure to reach approximately $21.7 billion in the following quarter.
Ming-Chi Kuo of TF International Securities said Google’s custom-chip ecosystem could “win more trust from customers and the supply chain”, according to Investing.com. Broadcom is a key partner in that ecosystem.
Nvidia’s earnings will test the recovery
Nvidia retains advantages that competitors cannot easily replicate, including its CUDA software ecosystem, advanced processors and deep customer relationships.
Its latest quarterly revenue reached $96.2 billion, with Data Center contributing $89 billion. Existing infrastructure commitments are unlikely to vanish simply because the company is changing chief executives.
That is important because Nvidia’s software tools and hardware designs remain embedded in major customers’ systems and spending plans.
“We still have little evidence of a pause in the AI buildout,” Morningstar analyst Brian Colello wrote on Friday. Nonetheless, he lowered his Nvidia fair value estimate from $310 to $250, citing greater uncertainty about future products and leadership.
That mixture of resilient demand and heightened risk helps explain the week’s volatile trading.
Nvidia is scheduled to report fiscal third-quarter earnings on 17 November, having previously forecast revenue of approximately $108 billion.
Investors will scrutinise margins, customer spending and management’s guidance under Kress.
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