Alphabet rises as Nvidia CEO exit spotlights Google chips

Jensen Huang resigned on Thursday, November 12, as president, chief executive and board member of Nvidia ↘ 5.19%, effective immediately. According to the company's announcement, chief financial officer Colette Kress will serve as interim CEO and will keep her finance role until the board names a permanent successor. The news hit Nvidia's stock and sent investors toward its rivals. Alphabet ↗ 1.72% gained the most of the big cloud companies, as traders bet that Google's in-house Tensor Processing Units (TPUs) could win AI chip spending that would otherwise go to Nvidia, Investing.com reported.sec.gov+1

Huang left after reports that he had two extramarital affairs, one of them with a woman U.S. intelligence agencies concluded was spying for China, The New York Times reported. His departure ends a 33-year run at the company he co-founded.nytimes.com

Chip rivals gain

Early in the session, Nvidia shares fell as much as 14%. They later recovered part of that loss, according to Reuters. Several other chipmakers moved higher. Broadcom ↗ 4.98%, which helps design Google's TPUs, and Advanced Micro Devices ↗ 5.32% both rose, while the S&P 500 ↘ 0.40% and Nasdaq Composite slipped, Reuters reported.live.euronext.com+1

TF International Securities analyst Ming-Chi Kuo said the uncertainty over who will lead Nvidia gives Google's chip ecosystem, including partners Broadcom and MediaTek, a chance to "win more trust from customers and the supply chain," Investing.com reported. Alphabet's gain also had other drivers. It came as the company committed to buy shares in Anthropic's upcoming IPO and completed a bond sale in Asia, according to Investing.com.sg.finance.yahoo.com+1

Two cloud models

24/7 Wall St. reported that Microsoft ↗ 0.24% and Amazon Amazon.com, Inc. ↗ 0.56% rose less than Alphabet. The outlet quoted Amazon CEO Andy Jassy, who said on the company's latest earnings call that "the number of companies who have a significant cloud business and a chip strong enough to sell externally is effectively two." In the outlet's reading, those two are Alphabet and Amazon, which runs most of its Bedrock AI service on its own Trainium chips. Microsoft pairs its in-house Maia systems with Nvidia hardware and depends more heavily on Nvidia.247wallst.com

Google Cloud revenue rose 103% from a year earlier to $30.71 billion in the third quarter. Alphabet's capital spending reached $51.36 billion in the same period, 24/7 Wall St. noted.247wallst.com

Nvidia's next test

Nvidia's board named Harvey Jones its first-ever chair. He said the company expects "operations, customer commitments and product roadmap to continue without interruption," 24/7 Wall St. reported. The company is set to report quarterly results on November 17. The gains in rival stocks do not mean Nvidia's customers have already moved orders elsewhere, TradingKey cautioned.tradingkey.com+1