The S&P 500 is up more than 3% this week even as Nvidia shares have plunged over 12%. Nvidia's decline has given other chip makers and hyperscalers room to breathe, and investors appear to be increasing their bets beyond a single story.
The S&P 500 has gained more than 3% this week to date, even as Nvidia's shares have plunged over 12% after an investigation was launched into CEO Jensen Huang. Huang resigned as CEO on Thursday.
Industrials, energy and consumer-discretionary stocks have been among the week's strongest performers in the index, according to FactSet data. Nvidia's decline also has not dragged the broader tech sector lower, as the S&P 500's information-technology sector is still up 3.6% so far this week.
Nvidia on track for lowest S&P 500 weighting since May 2025
Nvidia's market capitalization stands at around $3.9 trillion. The stock was on track for its lowest weighting in the S&P 500 since May 2025, according to FactSet data, though it remains the world's third-largest company by market value.
Mark Malek, CIO at Siebert Financial, said a single company above 6% of the S&P 500 turns its succession risk into a portfolio risk for index investors.
AMD jumps over 30% as chip index climbs
Advanced Micro Devices, one of Nvidia's biggest rivals, has popped over 30% this week. The PHLX Semiconductor Index is up more than 12% over the same period, according to FactSet data.
Bob Lang, founder and chief strategist at Explosive Options, expects Alphabet, Broadcom and AMD to grab share as Nvidia sorts things out. He also said Nvidia's decline may not have much impact on the broader AI trade, which is still likely to get a boost from Anthropic's IPO next week. According to Lang: "The demand remains strong for chips."
Stocks gave back most of their earlier losses in afternoon trading on Thursday. The Nasdaq Composite was falling 0.4%, while the S&P 500 was off 0.3% and the Dow Jones Industrial Average was losing 0.2%.
Source: MarketWatch
Trading involves risk.
Risk Disclaimer
