Broadcom’s gain is Nvidia’s pain

A supply-constrained AI boom is looking for answers, and not all of those might come from the $3 trillion juggernaut.

12/13/24 2:24PM

Chip company Broadcom’s 20% gain and entrance into the trillion-dollar-market-cap club is propelling the VanEck Semiconductor ETF up about 2% on Friday.

But that rising tide isn’t lifting the boat of industry titan Nvidia, which was down over 2% as of 2:20 p.m. ET on Friday.

Right now, the AI boom still looks supply-constrained. Microsoft can’t scale up its capabilities fast enough because of a lack of data centers — even as the US has more of these than most other countries combined. And Nvidia’s saying demand for its new chip will exceed supply for the foreseeable future.

Companies are feverishly working to muscle in on Nvidia’s turf — in addition to Broadcom, the likes of Amazon and Apple are at it (the latter with help from Broadcom!) — and the more success they have, the more that AI demand might be satisfied by Nvidia’s competitors.

Zooming out... Nvidia is still far and away the best-performing chip stock this year. And with those great gains come greater expectations, which become increasingly difficult to meet.

We warned that the magnitude of Nvidia’s hot run into its latest earnings report raised the risk that gains were being pulled forward, and an underperformance versus its peers could be looming thereafter.

And... yeah that’s pretty much what’s happened:

Matt Phillips2h

Memory stocks rebound off last weeks losses

Memory stocks Micron, Sandisk, Western Digital, and Seagate Technology Holdings rose again Friday, putting these crucial providers of chips for AI inference work on track for big weekly gains after last week’s steep losses following the outbreak of war with Iran.

There’s no obvious trigger for the move higher for these shares this week, other than a bit of a recovery in the AI trade more broadly — AI beneficiaries like IT cable and connections maker Amphenol and custom chip and networking company Marvell Technology clawed back some gains this week — perhaps due Oracle’s earnings earlier, and some mean reversion to boot.

Micron is due to report earnings after the close of trading on Wednesday, with the company catching a couple price target hikes this week, including one from Wedbush on Friday.

Sandisk is something of a different story, as its enormous gains over the last 12 months — roughly 1,200% — have made it a momentum play beloved by the retail crowd.

It was up about 20% this week at around 11 a.m. ET. And its nearly 170% gain this year keeps the stock on top of the S&P 500, in terms of price performance.

Luke Kawa

The S&P 500’s internals are awful... while it’s still less than 5% from its record closing high

The breadth of negative momentum within the index’s constituents is even worse than at the tariff-induced market bottom in April 2025.

Luke Kawa

These two charts show how the Iran war is causing markets to price in a longer oil supply crunch

The rise of third-month Brent futures relative to front-month this week is unprecedented since at least 1989.

Matt Phillips5h

Bitcoin bounce lifts crypto stocks

Crypto stocks rose in early Friday trading, riding a rebound in the price of bitcoin to more than $73,000.

Coinbase, Strategy, Circle, and MARA Holdings were among the biggest gainers of that cadre. Their end-of-the-week bounce might be getting a bit of extra oomph from the fact that companies have picked up a fair bit of interest from short sellers in 2026, as bitcoin fell about 15%.

Some of those shorts might be looking to quickly close out positions — which requires buying the stock — ahead of what could be another unpredictable weekend of war.

Max Knoblauch5h

Carvana announces plans for a 5-for-1 stock split, the company’s first

Online car retailer Carvana said on Friday that its board has approved a 5-for-1 stock split, a first for the company.

Carvana shares climbed more than 2% in premarket trading on Friday.

Per the company’s announcement, the move is “designed to ensure that earning and buying whole shares of Carvana stock is within reach for all of its team members.”

Pending stockholder approval, the split will occur after the market closes on May 6.

Carvana stock is down 31% this year following steep drops after its Q4 earnings results last month and a short seller report earlier in the year. Carvana told Sherwood News that the report was “inaccurate and intentionally misleading.”

Carvana Board of Directors Approves 5 for 1 Forward Stock Split