Nvidia turmoil reshuffles the AI trade. Winners, losers and what investors should watch
Jensen Huang’s exit from Nvidia is scrambling the tech landscape as investors try to gauge the fallout for chip makers, neoclouds, and others in the artificial intelligence arms race. The market has quickly passed judgement — bidding up shares of chipmakers like Advanced Micro Devices and Broadcom while pushing down neoclouds such as Coreweave and AI server maker Dell Technologies . Traders can benefit from the volatility, but the market has a tendency to overshoot in both directions and estimates are changing rapidly. Long-term investors may want to wait until the dust settles. The market’s initial take is that Nvidia’s rivals have an opening to capture chip sales while Nvidia undergoes a leadership transition and conducts an internal investigation of Huang’s activities. Nvidia reports earnings Tuesday, Nov. 17, and is expected to provide updates under interim CEO Colette Kress. AMD and Broadcom are both up around 17% over the past week, even after a pullback on Friday. The companies are expected to benefit from the turmoil at Nvidia, potentially grabbing market share for GPUs, in AMD’s case, and custom AI chips, for Broadcom. “The biggest thing that Nvidia now has to try to reestablish is trust. Once you lose the customer’s trust, it is going to benefit competitors,” said Jay Woods, chief market strategist at Freedom Capital Markets. “Given the cloud over Nvidia, this is the time for them to capitalize on the trust factor,” he added. AMD leads the pack AMD is Wall Street’s clearest winner if Nvidia customers shift some AI chip orders to other suppliers. The company competes with Nvidia in core GPUs — chips that handle AI core compute tasks like inference and training large models. “If Nvidia stumbles as a result of internal chaos, we see AMD as the clearest likely beneficiary,” Wedbush analyst Matthew Bryson said in a Thursday note, citing a massive need for AI GPUs beyond Nvidia. He reiterated a buy on the stock and $600 target. William Blair analyst Sebastien Naji also recommends AMD, saying the company has made “significant progress” in its Helios racks and secured large commitments for chips from OpenAI, Meta Platforms and Anthropic. Naji has a buy on the stock but no price target. Freedom Capital Market’s Woods highlights AMD’s technical strength, noting that the chip maker held up well during the recent chip selloff around the midterms. “It held it like a champ, then it rallied, and now it’s closer to new highs than any of its competitors in the index,” Woods said. That doesn’t mean it’s all clear for AMD. Pricing pressure is a worry if the U.S. cracks down on chip sales to China, notes Northland Capital Markets analyst Gus Richard. Tougher restrictions on chip exports to China could hit roughly 11% of GPU demand, compelling Nvidia to unload inventory and putting downward pressure on prices for AI GPUs. AMD may already be seeing a slowdown. Its inventory days — a measure of how long it holds chips before selling them — were up quarter over quarter at the end of October, Richard notes. More upside in AMD depends on whether it can grab market share from Nvidia, while maintaining pricing. A domestic slowdown in data center construction or more restrictions on China chip sales remain key risks. Still, AMD’s average price target is $657, implying 23% gains from recent prices around $532. Earnings estimates for 2027 are up to $17.75 a share from $16.28 on October 30. Custom chips could win Broadcom and Alphabet stand to gain if more companies turn to chips built for specific AI workloads. Wedbush’s Bryson sees an opening for Broadcom’s custom application-specific integrated circuits or ASICs. “Custom ASICs are where we believe companies want to turn,” he said in a note. For example, Meta has a long-term partnership with Broadcom to help build Meta Platforms ‘ custom MTIA chip. Elsewhere, Nvidia chip alternatives like Alphabet’s tensor processing units (TPUs) “can win at scale” according to William Blair’s Naji. Broadcom also helps develop and manufacture Google’s TPUs, though Google is diversifying from Broadcom. Despite some big gains lately, Broadcom stock is roughly flat for the year. Analysts see roughly 50% upside from recent prices around $345 with an average target of $526. While Broadcom could benefit from a shift from Nvidia, it’s also facing pressures. Rothschild & Co. analyst Mike Harrison downgraded the stock to neutral on Friday, with a $398.47 target. Among his concerns: Broadcom’s reliance on OpenAI and Anthropic, tighter AI financing, and Google’s move to design more chips in-house. “Google’s efforts to diversify away from Broadcom represent an important analogue for gauging the durability of Broadcom’s revenues from Anthropic and OpenAI,” he wrote. “If Google’s strategy works well, the market is likely to assume frontier labs eventually follow suit.” Arista could gain from networking shift A shift from Nvidia infrastructure to custom accelerators — chips designed to speed up certain AI workloads — should benefit cloud networking provider, Arista Networks , according to Evercore ISI analyst Amit Daryanani. Arista, which sells high-speed Ethernet switches and routing platforms for data centers, is the “clearest beneficiary” in that area, he wrote. A less dominant Nvidia “could accelerate adoption of open Ethernet architectures versus Nvidia’s more vertically integrated networking stack,” he wrote in a note on Thursday. Arista’s stock is up 54% this year but 2027 earnings estimates keep rising, including a jump from $5.25 to $6.05 a share since October 30, according to FactSet consensus estimates. Daryanani has a buy on the stock and $250 target, implying 26% gains from recent trading around $197. CoreWeave and Dell face rising pressure On the other side of the trade, neoclouds like CoreWeave may be under more stress if Nvidia pulls back on chip financing. Nvidia is both a chip supplier and financial backer of the neocloud, which is building and equipping data centers with plans to rent out massive amounts of AI compute. “All GPUs deployed across CoreWeave’s infrastructure today are Nvidia, while the company has also benefited from Nvidia investment and broader strategic partnership/capacity agreements,” wrote Daryanani. Brokerages like Goldman Sachs are standing by Coreweave, but others are skeptical. Despite a steep slide in CoreWeave stock, Bernstein analysts still view it as “under punished,” according to a note on Friday. The decline “is directionally appropriate given its more direct exposure to AI cloud spending and capacity-delivery risk,” Bernstein analysts wrote. While its forward multiple has compressed 61%, they see room for another roughly 10% decline. The problem for Dell, Daryanani noted, is that a majority of its AI server revenues come from Nvidia systems. “Dell would also face some risk given the size of its NVIDIA-based AI server business” as the company targets fiscal 2027 AI server revenues of roughly $74 billion, he noted. Dell slumped 7% Friday amid rising concerns about its growth. The stock is still up 173% this year, however. Wall Street’s average target is $595, 72% higher than recent trading around $344.
