Chip stocks spent four sessions clawing out of last week’s AI rout. Nvidia’s boardroom crisis just pulled the rug out from under them.
The comeback was fragile to begin with. A Yahoo Finance basket of 62 chip stocks had won back less than a third of the market value it lost from early October to last week’s low, and the PHLX Semiconductor Index (^SOX) was still stuck below its 200-day moving average despite a rally of about 17% off that low.
Then came Nvidia (NVDA). The stock tumbled after the bell Wednesday following reports that its board is preparing to oust CEO Jensen Huang, falling below a floor near $164 that had held twice in the past 14 months.
The scandal-plagued chipmaker had already shed about $190 billion in market value since last week’s low, even as TSMC (TSM), Broadcom (AVGO) and AMD (AMD) each added roughly a quarter of a trillion dollars. At its overnight low, Nvidia’s loss swelled to more than $600 billion, putting the stock at its lowest level since July 2025.
The rest of the market had been in better shape. The S&P 500 (^GSPC) clawed back about $2.5 trillion in market value over the same stretch, nearly 60% of what it lost in its monthlong slide from a record, according to Yahoo Finance calculations.
Software had lagged, too. Microsoft (MSFT) has slipped since last week’s low, and the iShares Expanded Tech-Software ETF (IGV) has managed only about 3%.
Brian Mulberry, chief market strategist at Zacks Investment Management, called it “not a relief rally but a belief rally that everything is still going to be okay” on Yahoo Finance’s Market Hang on Wednesday.
The broader market has bought in. The equal-weight S&P 500 (RSP), which gives the smallest member the same weight as Nvidia, is a whisker from its record. Apple (AAPL) closed at a record Wednesday.
Bespoke Investment Group noted that the S&P 500 itself is still oversold, even though most of its sectors are overbought. The index is being held back by its heavyweights.
Tech’s old floors are now its ceilings
Rebounds from a washout tend to stall where the selling first got serious, at old floors that have turned into ceilings.
For chip stocks, that wall sits near 11,100 to 11,200 on the chip index. That area held as a floor from May into October before it cracked, and it’s roughly halfway back from the October high. First, though, the index has to get back above its 200-day average, which it fell short of Wednesday.
The Nasdaq-100 (^NDX) jumped back above its 200-day level. Its line in the sand is 29,000, where the halfway mark of its slide meets its mid-October lows and early November highs. Traders who bought on the way down and got trapped may be happy to sell there just to break even.
