• Markets: Stocks closed mixed yesterday, with only the Nasdaq eking out a win. Investors warily eyed the Middle East, with oil rising after US–Iran tensions escalated (more on that in a minute).
• Stock spotlight: SpaceX continued its fall back to Earth yesterday, dropping below its IPO opening price despite becoming part of the Nasdaq 100 this week, which usually provides a bump.

IS IT CROWDED IN HERE?

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It’s 2019: You’re gushing about Avengers: Endgame, and a little computer chip company, Nvidia, has pretty cheap stock. Since then, Marvel hasn’t made a good movie, but Nvidia’s stock shot up like a Giant Sky Beam. Yet recently, it’s back at 2019 levels after a nearly $1 trillion loss in market value in less than two months, according to Bloomberg.

From the end of 2022 through last year, Nvidia’s stock price jumped over 1,100%, as its powerful GPUs became the clearest early winners of the AI boom. Even though the tech giant is still delivering stellar earnings, and it doesn’t seem like an AI bubble has popped:

• After hitting an all-time high in May, the stock fell 16% and hasn’t been able to get itself back up.
• Since the start of the year, Nvidia has only risen 5.6%. This pales in comparison to the performance of indexes it used to lap, like the S&P 500’s 9.6% gain this year and the Nasdaq 100’s 16% rise.

The biggest reason: competition

It’s not that investors no longer see AI infrastructure as valuable; it’s that they see a ton of opportunities as very valuable. Some investors are ditching Nvidia and parking their money in other chipmakers or in other companies selling highly lucrative memory and storage:

• The Philadelphia Stock Exchange Semiconductor Index has skyrocketed 74% this year.
• Nvidia’s rivals, like Advanced Micro Devices and startup SambaNova, have scored huge investments from investors hoping to catch the next Nvidia on its way up.
• High-bandwidth memory chipmaker Micron’s stock has gained 229% since the start of the year, after jumping 239% last year.

Big picture: Nvidia is still the chip to beat—it had a 97% chokehold on the server GPU market last year, per data from Bloomberg Intelligence. But everyone is coming for its crown: Even major Nvidia customers like Alphabet and Amazon are starting to develop their own chips. Chinese AI company DeepSeek is also in the process of making its own AI chip, according to Reuters.—MM

      

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