Quick Read – While the semiconductor ETF dropped 8% in a week, Nvidia gained 6%, trading more like a Magnificent Seven member than a typical chip stock. – Nvidia’s 31x trailing P/E offers a meaningful valuation cushion against the semiconductor ETF’s 40x, with Vera Rubin…
rnings growth still ahead. – A single hyperscaler signaling a CapEx freeze could shatter Nvidia’s resilience and trigger a panic-driven rotation away from AI stocks. – It’s been an unforgiving past week for the iShares Semiconductor ETF (NASDAQ:SOXX), down just over 8%, even with the 3.6% bounce on Wednesday. Meanwhile, shares of Nvidia (NASDAQ:NVDA) are up close to 6%, a stark contrast to the action we’ve seen in the semis of late
In many ways, it feels like Nvidia trades more like a member of the Magnificent Seven than like just another semiconductor firm. Given its wide economic moat and opportunities that go far beyond chips, perhaps Nvidia deserves to rally on the up days for the semis while being mostly spared from the pain when the semis implode. Since the start of the year, Nvidia hasn’t really traded closely with the hotter iShares Semiconductor ETF.
With the GPU giant missing the boat on the way up, perhaps it should come as no surprise to see the firm being spared from the latest wave of selling that hit the semiconductor scene so suddenly. Nvidia’s been surprisingly resilient amid the latest round of semi volatility While it’s far too soon to tell if Nvidia is immune to the semiconductor sell-off, something I mentioned in passing in a prior piece covering the AI chip giant, I do think that the company is behaving more like a defensive play on the chip scene. And once momentum does reverse course, I do view Nvidia as a firm that could outperform by losing less ground than its more cyclical peers that lack that software moat.