Nvidia has stood out among chip stocks this July, but a new drop on Friday, while Intel and AMD moved higher, hints that its strong run might be slowing down.
Nvidia shares dropped 0.4% before Friday’s opening, following a 1.5% decline the day before. Meanwhile, Advanced Micro Devices and Intel both rose in premarket trading, even though the VanEck Semiconductor ETF edged down.
Nvidia’s trading has recently moved in a different direction from other chip stocks. Its shares are up 4.3% in July, while Micron has dropped 14% and the broader semiconductor ETF is down 12% for the month.
Nvidia, the biggest chip stock, seems to have gained as investors shifted from semiconductors to large tech companies, though there are still worries about chip prices. This trend reversed this week. Alphabet’s earnings showed higher expected spending on data centers and chips, and Wall Street expects Microsoft and Amazon to do the same. Still, Big Tech stocks, including Nvidia, sold off.
Still, ongoing investment in chips and data-center parts should help Nvidia in the long run. The recent dip may show that investors now see Nvidia more as a Big Tech company like Alphabet, rather than a traditional chipmaker like Micron.
If this trend continues, some investors think Nvidia could regain its top spot among chip stocks and even outperform other Big Tech companies. We may get more answers next week, when Microsoft reports earnings on July 29 and Amazon reports the day after.
