Shares of Advanced Micro Devices and Broadcom retreated roughly 2% in Friday's pre-market session, partially unwinding Thursday's sharp rally as investors rotated back into Nvidia following the resignation of longtime CEO Jensen Huang.
Nvidia climbed about 2.5% before the opening bell, recovering from a 4.34% drop to $166.19 on Thursday. In the prior session, AMD had surged 5.86% to $585.30, while Broadcom advanced 5.54% to $364.36. The reversal highlights how quickly Wall Street is reassessing its positioning in the artificial intelligence chip sector.
Leadership change sparks volatility
The initial flight into AMD and Broadcom came after Huang's abrupt departure and the appointment of finance chief Colette Kress as interim CEO. Investors questioned whether the new leadership would maintain Huang's aggressive product roadmap and close ties with major cloud customers, making rival chipmakers appear more attractive in the short term.
Friday's rebound in Nvidia may reflect bargain hunting, while the pullback in AMD and Broadcom could be profit-taking after their strong gains. "The market appears to be distinguishing between a problem for Nvidia and a problem for AI," said Chris Weston, head of research at Pepperstone, in a Thursday interview. That distinction matters because companies can redirect spending toward alternative suppliers without abandoning their data center or AI plans.
However, switching chip vendors is not trivial. Buying shares in a competitor takes seconds, but changing an established computing platform involves lengthy technical validation, software rewrites, and contract negotiations.
AMD and Broadcom still have strong growth drivers
AMD challenges Nvidia directly with its Instinct AI accelerators and server processors. Its third-quarter revenue rose 45% to $13.4 billion, with Data Center sales jumping 97% to a record $8.5 billion. On Thursday, William Blair analyst Sebastien Naji upgraded AMD to Outperform, citing Nvidia's leadership uncertainty, Intel's supply problems, and improving prospects for AMD's next-generation AI systems.
Broadcom operates differently, supplying custom accelerators and networking technology to cloud operators building their own infrastructure. Its fiscal third-quarter AI semiconductor revenue reached $16.7 billion, up 221% year over year, with management projecting approximately $21.7 billion in the following quarter. Analyst Ming-Chi Kuo of TF International Securities noted that Google's custom-chip ecosystem could "win more trust from customers and the supply chain," with Broadcom as a key partner.
Nvidia's earnings will test the recovery
Nvidia retains advantages that competitors cannot easily replicate, including its CUDA software ecosystem, advanced processors, and deep customer relationships. Its latest quarterly revenue reached $96.2 billion, with Data Center contributing $89 billion. Existing infrastructure commitments are unlikely to vanish simply because the company is changing chief executives.
"We still have little evidence of a pause in the AI buildout," wrote Morningstar analyst Brian Colello on Friday. Nonetheless, he lowered Nvidia's fair value estimate from $310 to $250, citing greater uncertainty about future products and leadership. That mix of resilient demand and heightened risk explains the week's volatile trading.
Nvidia is scheduled to report fiscal third-quarter earnings on 17 November, having previously forecast revenue of approximately $108 billion. Investors will scrutinize margins, customer spending, and management's guidance under Kress.
This article is for informational purposes only and does not constitute financial advice.
