When Bad News Is Good News: Nvidia Rival Led by Jensen Huang’s Cousin Rallies Amid Ex-CEO’s ‘Spy Soap Opera’

After Jensen Huang, the longtime Nvidia CEO and charismatic face of the AI boom, resigned Thursday, Elon Musk let him know on X that he’s leaving the door open at his shop — and we’d not be the least surprised if HBO called about a miniseries.

In the immediate term, the company he cofounded in 1993 is facing a mountain of scrutiny, and Wall Street is betting one of the chief beneficiaries will be a rival led by Huang’s cousin.

All in the Extended Family

Advanced Micro Devices CEO Lisa Su is Huang’s uncle’s granddaughter, making them cousins once removed (aka cousins from different generations). And investors who threw their lot in with Su’s AMD, which is up 162% this year on the Nasdaq, have been rewarded in ways that rivals including Nvidia, down 12%, and Broadcom, up 4.8%, haven’t delivered.

Su has proven very successful at wooing major AI hyperscalers, as well as neocloud providers, to adopt AMD hardware to bypass supply constraints at Nvidia, reducing dependencies on one vendor in the process. OpenAI, Meta and Oracle are among those to ink major deals with AMD this year. Su also made a bold acquisition this year, paying $8.2 billion for World Labs, a California-based frontier AI company led by the “Godmother of AI” and former Google Cloud Chief Scientist Fei-Fei Li that develops models capable of building 3-D virtual environments to train robots and autonomous systems. The work has paid off: Revenue rose 45% to $13.4 billion in the third quarter. Data center revenue nearly doubled to $8.5 billion on the strength of AMD’s Instinct AI GPU chips, a direct competitor to Nvidia’s AI accelerators. Net income climbed 95% to $2.4 billion, and the company forecast faster-than-expected growth, including $17 billion in fourth-quarter revenue.

Meanwhile, Huang’s admitted and alleged affairs, especially the one with the suspected foreign spy, mean Nvidia could soon be experiencing more probes than outer space (Huang may wish he was on a Mars rover at this point). On top of an arm’s-length internal review, the Justice Department, the FBI and congressional Democrats are all reportedly lining up their own investigations. “We see a runway for [AMD] shares to work from here … as AMD stays focused on execution while its largest competitor, Nvidia, contends with a growing leadership and regulatory imbroglio,” said William Blair analysts, in a note to clients Thursday. That was reflected in market sentiment:

• AMD rallied 5.9% on Thursday and Broadcom 5.5%, while Nvidia closed down 4.3%.
• Of 48 analysts surveyed by Zacks Investment Research, 40 rate AMD a buy and the average $660 price target implies the company’s stock has a 19% upside.

Not So Fast: Don’t sleep on Nvidia. Semiconductor research firm Silicon Analysts estimates the GPU leader still holds a commanding 80% to 90% market share in the AI accelerator market, while second place AMD has just 5% to 7%. Dan Ives, a partner at Yorkville Ives who earlier this week said Huang’s “spy soap opera” could cause Nvidia shares to lose up to 30% in value, said Thursday that his firm “remains bullish” on the stock. Yorkville’s $225 price target implies a 35% upside.