Investors have lost faith in Nvidia and rushed to buy Broadcom shares

Over the past five days, Nvidia shares have lost 5%, while Broadcom shares have gained an impressive 40%. In both cases, the dynamics of rates are influenced by the hype around artificial intelligence, CNBC points out.

Image source: broadcom.com

Nvidia shares showed a 1.8% decline before the start of trading today and entered the correction zone – the so-called boundary that indicates a price drop of 10% or more from the all-time closing high. Nvidia shares reached a historical maximum at the close of trading in November at $148.88. At the same time, Broadcom securities continued to grow and rose by 1.9% before the start of trading.

The optimism of investors around Broadcom was provoked by the quarterly report published by the company: the profit amount and the chipmaker’s own revenue forecast were higher than expected. Several major Wall Street brokers, including Goldman Sachs, raised their price targets for Broadcom shares.

However, sharp changes in the balance of power are not yet expected: since the beginning of the year, Broadcom shares have increased in price by 120%, and Nvidia securities have risen in price by 160% over the same time. Nvidia AI accelerators are used to train the largest models by most developers; Broadcom develops interfaces that enable the creation of more complex AI accelerators, and also creates network interfaces that are required by the largest cloud service providers.