As Nvidia Reels From Huang's Exit, Rivals and Suppliers Rally on Leadership Uncertainty

Nvidia's shares have fallen 11% this week. Over the same stretch, AMD has gained 30% and Broadcom 24%. That gap is the clearest measure so far of how investors are treating the resignation of Jensen Huang, who stepped down after revelations about his multiple affairs, including one with a woman the U.S. intelligence community is believed to regard as a Chinese spy.

The money is not leaving chips altogether. It is moving within the sector, away from the company that has dominated AI processors and toward its competitors and partners. Mark Franklin, head of multi-asset solutions for Asia at Manulife Investment Management, described it as a rotation into other advanced chip design companies, built on the assumption that they can now effectively catch up. He said the rotation was already feeding positive momentum in other semiconductor stocks.

Farzin Azam, managing director of equities trading at Mizuho Americas, said he sees the shift on trading desks, where investors are favoring chipmakers less exposed to Nvidia's management turmoil. He named TSMC, Broadcom and Advanced Micro Devices as likely winners because they do not carry the overhang of a management disruption.

TSMC, which manufactures Nvidia's most advanced processors, is up 11% this week. The reporting says it stands to benefit whichever chip designer gains or loses, and that it also looks like a relatively safer way to stay invested in the AI theme for investors wary of riskier names. Market watchers also point to a possible redistribution of manufacturing capacity.

The move has spread into the less speculative end of the industry. Analog chipmakers have climbed as investors take a more defensive stance: Texas Instruments is up about 13%, Analog Devices 12%, and Germany's Infineon 14%.

The competitive argument rests on Nvidia's technology lead. A voice identified as Patel in the source put it this way: if Nvidia cannot muster its supply chain, technology is its only advantage, and it is unclear whether that advantage holds without Huang. Nvidia is only about a year ahead of its biggest competitors, Patel said, so the gap is not massive. The pressure is sharper because hyperscalers are increasingly building their own AI chips to rely less on Nvidia, while AMD and others race for a bigger share of the market.

None of this necessarily means the AI investment boom is ending. Franklin noted that major technology companies are projecting higher AI spending in 2027, with further increases possible in 2028, which suggests the investment cycle is structurally intact even as investors reassess who benefits. The bigger long-term question, he said, is whether growing competition and the spread of open-source technologies eventually commoditize AI capabilities, squeezing chip prices and investment returns.

For Nvidia, the near-term outlook may hinge less on its numbers than on whether its next leadership team can reassure investors. Azam said the stock looks inexpensive relative to its earnings growth prospects, but warned that ongoing investigations and management uncertainty could limit any lasting recovery. He expects strong results when Nvidia reports on Nov. 17, with investors focused on management's plans for handling the crisis. Franklin said investors are growing comfortable staying in the market while rotating and diversifying, rather than leaving it.