Jensen Huang's resignation from Nvidia and a Democratic takeover of Congress are prompting ETF managers and analysts to reassess the AI trade, with some arguing that Big Tech hyperscalers stand to benefit most from the uncertainty.
The resignation of Nvidia founder and CEO Jensen Huang — following reports of extramarital affairs, including one with an alleged Chinese spy — sent shockwaves through the AI investment landscape this week, prompting analysts and fund managers to reassess where capital will flow as the chip giant enters an uncertain new chapter.
Nvidia posted its longest losing streak since 2012 by week's end, with shares finishing at $162.85. Meanwhile, Elon Musk warned on Saturday that the company's supplier relationships may not survive the leadership change. "Jensen drove supply chain brilliantly at Nvidia, but many of those deals were a handshake with Jensen, not a written contract," Musk wrote, adding that "critical deals will be lost."
Colette Kress, Nvidia's chief financial officer and newly appointed interim CEO, will face her first test with Wall Street when the company reports third-quarter earnings next Tuesday. "Our focus remains on serving our customers, partners, developers and shareholders," Kress said in a statement issued Thursday when Huang's departure was announced.
Despite the turbulence, some market observers see a potential reshuffling of the AI trade that could benefit the sector's largest incumbents. Dave Mazza, CEO of Roundhill Investments — which manages the Magnificent Seven ETF, ticker MAGS — argued that hyperscalers stand to gain if confidence in Nvidia erodes. "If we get into an environment where people can't trust … Nvidia, they're going to look for other sources for these chips because they need them," Mazza said in an interview on CNBC's "ETF Edge" earlier this week.
"We may have been put in an environment, as much as investors have sort of been looking for areas outside of Big Tech, where net-net Big Tech ends up as the winner once again," Mazza added.
The Roundhill Magnificent Seven ETF ended the week in the green, though its gain was less than 1%. The Roundhill Neocloud ETF, which focuses on smaller-cap specialized cloud computing companies, rose just over 1% on the week but remains down 39% since its August 2026 launch. Earnings from two of its top holdings presented a mixed picture: CoreWeave posted its best single-day gain since April 2025 on Wednesday following quarterly results, while Nebius shares fell sharply after its Thursday report. CoreWeave shares then retreated again on Friday.
Dan Ives, a partner and senior managing director at Yorkville Ives, lowered his price target on Nvidia to $225 from $300 on Thursday following Huang's resignation, but maintained a buy rating on the stock. "Nvidia remains the clear leader in GPU chips for the AI Revolution. They are roughly 2-3 years ahead of the nearest competitor and the demand trajectory the next few years is not changing because Jensen is gone," Ives wrote in a note to investors. He estimated valuation at roughly 10 times 28 earnings per share, calling the stock "way too cheap" once the company stabilizes.
Ives said on "ETF Edge" that AMD and Alphabet could benefit if Nvidia faces prolonged headwinds — a thesis the market appeared to begin pricing in. AMD finished the week up close to 13%, with Broadcom posting similar gains. The tech-heavy Nasdaq index recorded its best week since August.
A second major variable now shaping the AI trade is the political landscape. Democrats swept control of Congress in the November 3 elections, and Mazza said a legislative pushback on data-center construction could further tighten the available compute supply, paradoxically making existing infrastructure more valuable.
Ives estimated that the "blue tidal wave" in Congress could mean 10% of planned data centers fail to materialize on the low end, and between 15% and 20% on the high end. Even so, he said demand still outstrips supply four to one. "The game is going to change for Big Tech. It will slow it down. But there's no overbuild, no bubble concerns. And I view that as actually a positive thing," Ives said.
With Kress set to address investors at next week's earnings call and Congress potentially moving to limit data-center expansion, the coming weeks will offer the first clear signal of whether the AI buildout can sustain its momentum without its most recognizable architect at the helm.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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Written for readers who already know the basics — markets, AI, and the policy decisions that shape both.