Wall Street is not overly concerned about how much impact Jensen Huang's departure as CEO of NVIDIA (NVDA) will have on the AI investment boom, according to a report on the 13th.
After trading opened on the 12th local time, NVIDIA shares plunged as much as 14%, dragging down other AI-related stocks. However, as investors refocused on the long-term demand of the AI industry and began searching for companies that might benefit from the turmoil, the sell-off quickly eased. NVIDIA ultimately closed down 4.3%. Steve Sosnick, chief strategist at Interactive Brokers, noted: "The market isn't concerned with assessing risk — it's looking for opportunities. Investors are thinking: 'If NVIDIA cedes market share, who stands to benefit?'"
Broadcom and AMD shares surged as a result, becoming the stocks that contributed the most to the S&P 500's gains. Investors believe both companies have the potential to capture business that NVIDIA may lose due to the upheaval. The Philadelphia Semiconductor Index fell as much as 3.7% at the open but recovered most of its losses, closing down only 0.5%. Patrick Moorhead, CEO and chief analyst at Moor Insights & Strategy, said: "In the short and medium term, I don't think this will change the AI investment landscape. Broadcom, Intel, and numerous startups are all capable of filling many of the market gaps NVIDIA might leave behind."
In recent weeks, the market has been worried about whether massive AI investments can be sustained long-term, putting pressure on AI-related stocks. The results of the U.S. midterm elections also dampened some investors' enthusiasm, as many state and local candidates who opposed building data centers in their communities won their races. However, Wall Street insiders point out that major AI cloud service providers have committed to maintaining large-scale investments through 2027, which can provide short-term support for the AI sector.
NVIDIA, with its performance-leading chip products, became one of the earliest beneficiaries of the AI boom, and Huang also played a significant role in promoting infrastructure development and facilitating business partnerships. But the AI industry's growth no longer depends on NVIDIA alone. Angelo Zino, senior vice president and head of technology research at CFRA, noted that recent earnings reports from AI companies show demand remains strong. "The AI industry has come too far to be considered nascent anymore. I don't believe Huang's departure alone can change all of this."
The uncertainty that Huang's exit brings to NVIDIA's future still cannot be ignored. He had previously invested NVIDIA's profits in dozens of companies across the AI supply chain, creating complex circular investment relationships. With Huang gone, some of these companies could be affected. These concerns caused AI cloud service providers Nebius and CoreWeave to face investor selling pressure, while server manufacturer Super Micro Computer also saw its shares plunge 11% on separate news.
Brian Colello, equity strategist at Morningstar Investment Service, pointed out: "If Huang had partnered with smaller companies, provided support, or even invested directly, allowing them to benefit from his endorsement, then that advantage would also disappear with his departure." Colello believes that Huang has long been a representative figure in the AI industry and a highly respected technology advocate, and the AI industry will to some extent lose a leader who championed technological development and promoted AI's advantages. "NVIDIA's new CEO will also need to take on this role — it's just one of many responsibilities."
Nancy Tengler, chief investment officer at Laffer Tengler Investments, said: "One thing I've learned over the years: no one is irreplaceable. I don't think this will have a significant impact on the overall AI investment market. For NVIDIA shareholders, this is just an unfortunate minor episode." Alan Bond, managing director and portfolio manager at Jensen Investment Management, noted: "AI is a transformative technology, and that won't change. There are still many uncertainties in AI's development, but one thing is very clear: AI requires extremely massive and costly computing power. We believe this round of infrastructure buildout will continue."
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