Intel has forged a pivotal collaboration with Nvidia established in mid-2025, involving a $5 billion investment from Nvidia and its commitment as a foundry client. This partnership led to co-developed CPUs integrating Nvidia GPU IP and custom Xeon CPUs with Nvidia's NVLink for data centers. At Computex 2026, Intel announced a strategic partnership with Foxconn to develop next-generation AI infrastructure and intelligent computing platforms, specifically targeting AI data centers. Additionally, Intel deepened its collaboration with Google in April 2026 to advance AI and cloud infrastructure through Intel Xeon processors and custom infrastructure processing units (IPUs). These alliances contribute to Intel's CEO Lip-Bu Tan's report that AI-driven businesses constituted 60% of Q1 revenue, growing 40% year-over-year. The broader semiconductor market has experienced substantial growth, with the global semiconductor market seeing a significant year-on-year increase of 79.2% in fiscal Q1 2026, reaching $298.55 billion in sales, primarily driven by strong demand from data centers, AI applications, cloud computing, and automotive sectors.
Nvidia stock is experiencing its most negative institutional money flow among major semiconductor companies, with the stock showing a deep negative reading of -0.19 on the 20-day Chaikin Money Flow indicator. According to reports from MarketWatch, this indicator serves as a proxy for institutional money flow, indicating that big investors are stepping back from the chip stock rather than loading up. The selling pressure is specific to Nvidia, with the stock up only 2.6% year-to-date and down approximately 18% from its May peak, while the semiconductor index has nearly doubled over the past six months. Nvidia scores just 52.9 on relative strength against the semiconductor index, highlighting the stark performance gap between the company and its sector peers. The cautious mood follows a volatile week for global markets, with investors increasingly questioning whether surging AI-related capital spending and semiconductor valuations can continue to justify their rapid gains after this year's rally.
The capital flowing out of Nvidia has primarily moved into the memory sector, with Micron recently posting record revenue of ₹3,46,000 crore ($41.46 billion), up 346% year-over-year, and the stock jumping approximately 15% immediately after. As reported by MarketWatch, Micron also guided next-quarter sales near ₹4,00,000 crore ($50 billion), well above forecasts. The Micron stock forecast has become one of the hottest on Wall Street, with the memory chip maker's entire HBM (specialized AI memory) sold out and prices continuing to climb. Micron's stock price has roughly tripled this year, with the company even briefly passing Meta in value, as investors moved from Nvidia to its supplier due to memory chip shortages. Despite upbeat earnings guidance from Micron last week, analysts said investors are becoming more selective within the AI trade, rotating away from some of the market's biggest winners amid concerns over when massive AI investments will translate into stronger earnings growth.
Nvidia's largest buyers are building their own AI chips, creating a fundamental shift in the competitive landscape. According to MarketWatch, Alphabet now sells its in-house AI chips to outside customers, with Anthropic planning to spend about ₹16,00,000 crore ($200 billion) with Alphabet over five years. Citizens analyst Andrew Boone estimates Alphabet's chip business could grow from about ₹24,000 crore ($3 billion) in 2026 to ₹2,00,000 crore ($25 billion) in 2027. This development explains why investors doubt Nvidia can maintain top pricing, as the giant cloud firms that buy the most Nvidia chips need fewer of them once they manufacture their own alternatives.
The AI chip rotation is creating mixed performance across global markets, with South Korea's KOSPI particularly sensitive to the sentiment shift after posting one of the strongest rallies among major global equity markets this year. As reported by Investing.com, the chipmakers lost 4.8% and 1.7%, respectively, on Monday, with Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) declining despite their strong year-to-date performance. In contrast, Hong Kong-listed Baidu Inc (HK:9888) outperformed regional technology peers after a report said its AI chip unit, Kunlunxin, is targeting a Hong Kong initial public offering at a valuation of about $50 billion, highlighting continued investor appetite for China's domestic AI sector. Meanwhile, Japan's SoftBank Group Corp. (TYO:9984) slid more than 5% to its lowest level since late May, extending last week's losses after reports that OpenAI could delay its planned initial public offering, raising fresh questions over the timing of returns on the conglomerate's sizeable AI investments.
Wells Fargo analyst Aaron Rakers cut his Nvidia target from ₹2,875 ($375) to ₹2,675 ($315) while maintaining his buy rating on June 1, reflecting the broader institutional skepticism. As reported by MarketWatch, the buy ratings have not changed, with Nvidia still holding a Strong Buy consensus with 37 buy ratings, one hold, and no sells over the past month, and an average target near ₹2,700 ($309). However, the ceiling is dropping as analysts still like the business fundamentals but no longer trust the premium pricing. Wedbush maintains a ₹2,875 ($330) target and calls the selloff a buying opportunity, highlighting the tension between strong fundamentals and negative money flow. The cautious mood follows a volatile week for global markets, with investors increasingly questioning whether surging AI-related capital spending and semiconductor valuations can continue to justify their rapid gains after this year's rally.
Despite the negative money flow, Nvidia's revenue continues growing fast with strong Blackwell demand, and the forward price-to-earnings ratio has slipped to approximately 20 times earnings, making it cheap compared to several AI peers. According to MarketWatch, investors pay about ₹20 for every ₹1 of profit the company is expected to earn over the next year, representing a low price for a top AI name. However, the first real signal of a turn would be Chaikin Money Flow returning to accumulation, until which time Nvidia remains no longer the default chip stock, with smart money shopping elsewhere in the sector. Technology shares remained under pressure after last week's sharp swings across global semiconductor stocks highlighted growing investor unease over elevated valuations, with month-end and quarter-end portfolio rebalancing also appearing to weigh on the sector.
