Nvidia's blowout earnings lift AMD while other chipmakers such as Intel fall
- Nvidia's stock performance has been a boon for some names but has sent shares of conventional CPU manufacturers such as Intel down in Thursday trading.
- The VanEck Semiconductor Index, an ETF basket of chipmaker names that includes Nvidia and Intel, rose in Thursday morning trading.
- But a possible reorientation toward conventional GPU powerhouses such as Nvidia could come at the expense of CPU-oriented firms such as Intel.
Nvidia's stock surge buoyed many semiconductor names in Thursday trading, particularly firms that specialize in AI-favored chips.
Notably missing from the broader rally was Intel, which has struggled even before the AI boom.
Nvidia shares closed up 24% as it approaches a $1 trillion market cap, alongside a notable 11% gain in shares of Advanced Micro Devices. Both Nvidia and AMD specialize in so-called discrete, or standalone, graphics processing units.
Marvell stock, which closed up 7.6% and Broadcom, shares of which rose by 7.25%, benefited by their exposure to cloud computing and potential AI applications. Marvell partners with companies including Google, Meta and Microsoft; Broadcom has been developing technologies to link AI supercomputers together.
Meanwhile, shares of conventional computer chip firms dipped. Intel shares were closed down about 5.5% in late-day trading. Qualcomm, which manufactures mobile chipsets, initially slipped as much as 1.3% before recovering losses later in the day to close up around 1%.
The wide array of price actions suggests a flight away from a focus on traditional computer chips and toward GPU manufacturers. GPUs have enjoyed surging enterprise demand as startups and established tech firms scramble to build out AI platforms. GPUs are the "brains" behind large-language models and other AI technologies, helping to power OpenAI's ChatGPT and Google's Bard.
"Instead of millions of CPUs, you'll have a lot fewer CPUs, but they will be connected to millions of GPUs," Nvidia CEO Jensen Huang told CNBC.
Historically, the opposite has been true. The potential inversion may be driving the flight away from CPU names and toward Intel and AMD.
Shares of Taiwan Semiconductor Manufacturing Company also rose 12%. TSMC is a key part of the manufacturing process for many semiconductor firms that design their own chips but can rely on TSMC to handle the delicate and technical manufacturing process.
The VanEck Semiconductor Index, an ETF basket of chipmaker names that includes Nvidia and Intel, rose nearly 8.6% in Thursday trading.
— CNBC's Kif Leswing and Robert Hum contributed to this report.