AMD and Broadcom stocks gain about 18% in a week as Nvidia CEO exits
AMD and Broadcom shares each ended the week about 18% higher, as investors bought Nvidia’s main chip rivals after Nvidia chief executive Jensen Huang resigned on Thursday. AMD closed Friday 13 November at $534.06, up from $449.04 a week earlier, and Broadcom at $347.01, up from $293.69, according to daily price histories for both stocks.
The gains were large even after a sharp Friday reversal. AMD fell 8.75% on the last day of the week, The Motley Fool reported, and Broadcom gave back nearly 5%, as rising bond yields and profit-taking hit the whole AI-chip group.
Why did AMD and Broadcom shares rise this week?
Two things happened. First, AMD had its own good news on Monday. The stock jumped 13.26% to $508.58 after AMD said its fifth-generation EPYC server processors will power Google Cloud’s new TPU 8tx AI system, and Oppenheimer upgraded the shares to Outperform with a $600 price target, MarketBeat reported. That move also reversed a 17% slide after AMD’s results the previous week.
Second, Nvidia’s leadership crisis came to a head. On Thursday Nvidia said in a regulatory filing that Huang had stepped down and that finance chief Colette Kress would serve as interim CEO while also remaining CFO. The resignation followed reports about his personal conduct. Nvidia shares fell 4.3% that day after dropping more than 13% at the open, CNBC reported, while AMD and Broadcom both rose about 6%, according to Yahoo Finance.
The logic is straightforward. Big cloud companies and AI labs buy chips from a handful of suppliers. If investors think Nvidia’s leadership change could slow its decision-making or deal-making, the obvious alternatives are AMD’s GPUs and server chips and Broadcom’s custom AI chips. Analysts added fuel: William Blair upgraded AMD to Outperform and BofA raised its target to $700 from $650, Yahoo Finance said.
Are the fundamentals behind the rally real?
Both companies came into the week with strong numbers. AMD reported third-quarter revenue of $13.4 billion, with data-centre sales nearly doubling from a year earlier, The Motley Fool noted. On the earnings call CEO Lisa Su said “demand is higher than supply,” as quoted by Yahoo Finance. Broadcom’s AI semiconductor revenue rose 221% to $16.7 billion in its fiscal third quarter, according to the same Yahoo report.
But the size of this week’s move was driven by sentiment as much as by new orders. As Yahoo Finance put it after Friday’s drop: “That gain came from Nvidia’s turmoil, and fast money leaves fast.” There is no evidence yet that Nvidia customers are cancelling orders or switching suppliers.
Why did AMD stock fall on Friday?
AMD issued no news of its own on Friday. The selling came from the wider market. A hotter-than-hoped reading on wholesale inflation pushed the 10-year Treasury yield as high as 5.17%, Yahoo Finance reported, and higher yields weigh most on stocks valued on profits far in the future. Arm fell 5%, Marvell 5% and Intel 3%. AMD’s trading volume was about 98% above its three-month average, The Motley Fool said, which tells you how crowded the trade had become.
Valuation also matters. AMD traded at about 39 times forward earnings at Thursday’s close against a five-year average of about 35 times, Yahoo Finance said, and roughly 35 times after Friday’s fall. In other words, Friday’s drop simply took the stock back towards its usual valuation.
What does this mean for traders?
For short-term traders, this is a textbook “rotation” week: money leaving one leader and piling into its rivals, then partly leaving again when the macro backdrop turns. Moves of 13% on a Monday and 9% on a Friday show how wide the daily ranges are, so position size and stop placement matter more than usual.
Longer term, the key question is whether customers really diversify away from Nvidia, or whether this was a sentiment trade. That will become clearer as Nvidia reports and as cloud companies talk about their chip budgets. The broader index impact is covered in our S&P 500 weekly wrap, and the AI-chip theme also helped lift Cerebras after its first core profit.
What should traders watch next?
- Nvidia results, Tuesday 17 November. Nvidia reports fiscal third-quarter results at about 1:20 pm Pacific time, CNBC said. Comments from Kress on customer commitments will be read closely by AMD and Broadcom holders.
- Analyst moves on Nvidia. HSBC cut Nvidia to Hold and its target to $170 from $365, CNBC reported. Further downgrades could keep rivals in favour.
- Bond yields. With the 10-year yield above 5%, inflation data and Fed comments can swing all high-valuation chip stocks.
- OpenAI exposure. Yahoo Finance noted OpenAI holds up to 6 gigawatts of AMD Helios commitments; any news on its funding feeds straight into AMD.
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This article is for education and information only and is not financial advice. Figures are as reported by the sources linked above.
