Nvidia falls 12.8% as chip rivals surge on market rotation
Nvidia shares dropped 12.8% following a Wall Street Journal report alleging the company financed customers to secure chip orders. Meanwhile, AMD and Broadcom surged, with the semiconductor index gaining 8.1% for the week.
The S&P 500 rose 2.5%, the DAX 3.6%, and the Nasdaq 100 3.5% for the week, despite a 'tough' week involving hot US inflation data and rising US bond yields to 5.1%. The semiconductor index (SOX) gained 8.1%, with AMD up 18.9% and Broadcom up 18.2%, while Nvidia fell 12.8%. Nvidia’s decline was attributed to a Wall Street Journal report alleging the company financed customers to secure chip orders, a practice described as a 'bribe.' Nvidia is expected to report earnings on Tuesday with 91% revenue growth anticipated. Bitcoin fell 10% for the week, and gold dropped 4.5% to below $4,000. Anthropic’s IPO is mentioned as a positive development, with pre-market prices between $1.7 and $1.8 trillion against a $1.5 trillion valuation, and the offering reportedly oversubscribed six times. The hosts view the market’s resilience to negative news as a sign of strength, noting that Nvidia’s loss may signal it is no longer the 'untouchable number one,' while the surge in AMD and Broadcom suggests the market does not believe the AI supercycle is stalling.