Huang Bump Seen Fading for Nvidia-Linked Stocks Riding AI Rally
(Bloomberg) — While mention of ties to Nvidia Corp. still sparks big jumps in shares of companies around the world, the gains can prove to be short-lived and some investors are questioning whether the halo effect is fading.
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Samsung Electronics Co.’s stock gained over 3% last Wednesday after Nvidia founder Jensen Huang expressed confidence in the Korean firm’s memory-chip capabilities. MediaTek Inc. nearly touched a record high after the Taiwanese company announced an Nvidia tie-up during the CES trade show, where Huang gave a keynote address. Both stocks have retreated around 6% since then.
The US chip giant’s own stock has dropped 12% since Huang’s CES presentation. Geopolitics and tech trade policy have weighed on the sector, while growing competition for investor attention poses another threat to the company’s Midas touch.
“I have doubts whether Jensen Huang’s comments could have as much power this year as last year,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global Pte. “Nvidia’s position is still dominant, but rivals are also rising and we should increasingly focus on what non-Nvidia players are saying.”
Concerns over possible delays in Federal Reserve rate cuts have taken some of the wind out of tech stocks in recent weeks, as have Biden administration curbs on export of AI chips. The market is also focused on policy plans by Donald Trump and key adviser Elon Musk.
“Nvidia’s power was much stronger last year as the AI chip was still a fresh idea and its stock skyrocketed,” said Ahn Hyunsang, chief executive officer at Korea Investment Research Institute, which provides stock trading tips to day traders. “This year, Trump and Musk are expected to have a much bigger influence.”
It’s far too early to call time on Nvidia’s rally, with the stock touching a new all-time high just last week before the CES excitement cooled. And it certainly still has power to move other companies’ shares.
SKC Co. is up more than 50% already this year amid excitement over a meeting between its group chairman and Huang at CES. The small South Korean firm’s stock is the top performer on MSCI Inc. equity benchmarks for both Asia and emerging markets so far in 2025.
“What the market loves is whether a stock can be included in the supply chain of a dominant player,” said Rho Wooho, an analyst at Meritz Securities Co. The speculation has pushed SKC’s shares to new levels even though the company has been posting losses for the past few years, he added.
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