Investors abandon Nvidia as Nasdaq hits high

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Do you like what you see? You can subscribe here.

Losing streak for the Dow Jones
On Monday, the Dow Jones Industrial Average lost 0.25% due to its eighth consecutive day of defeatsthe longest streak since 2018. S&P 500 gained 0.38% and the Nasdaq Composite It advanced 1.24% to close at a new high. Asia-Pacific markets were mixed on tuesday. China’s CSI 300 rose about 0.4% after lawmakers reportedly planned to increase the country’s budget deficit in 2025.

Correction: Nvidia
NVIDIA Shares fell 1.7% on Monday to close at $132. That’s about 11% off its closing high of $148.88 in November, putting Nvidia in correction territory. That said, Nvidia is still up 166% this year and a correction doesn’t necessarily indicate a sustained downtrend. Additionally, other chip manufacturers, such as Broadcomthey are still moving forward.

Paving the Waymo in Tokyo
Waymo will start testing its autonomous vehicles in Tokyo starting in 2025, the company announced Monday. This is the Alphabet-owned company’s first entry into an international market and on a left-hand drive road. Local taxi operator Nihon Kotsu and taxi app GO will be Waymo partners in Tokyo.

Investment incentive or deterrent?
Indonesia banned the sale of apple iPhone 16 in October due to its law require companies to invest in or obtain components from the country. The government is now asking Apple to invest a billion dollars in the manufacturing of mobile phone components in Indonesia. However, analysts believe that such tactics to attract investments to the country could be counterproductive.

(PRO) Small European businesses too
Small- and mid-cap companies in the United States have been attracting attention (and inflows) in recent weeks, thanks to Trump’s ostensible focus on the domestic economy. On the other side of the Atlantic, European companies of that size They are also likely to outperform their larger peers in the next month, according to Deutsche Bank strategists.

The frustrating thing for Nvidia (and its shareholders) is that, apart from a investigation by a Chinese regulator, there have been no other major obstacles along the way: in fact, the company’s fundamentals are stable.

As Keith Lerner, co-chief investment officer at Truist, points out, Nvidia’s position in the semiconductor and artificial intelligence industry remains unchanged. “You need Nvidia and its chips for infrastructure,” Lerner said. “But I think what the market is also saying is that there are other beneficiaries besides that.”

The fact that the Nasdaq Composite closed at another record despite Nvidia’s decline is a sign of that rotation toward other semiconductor and AI-related stocks.

Most strikingly, Broadcom shares have stepped on the accelerator, rising on Friday and Monday thanks to a brilliant fourth quarter earnings report and increasing price targets by banks.

“Momentum has been driving this stock. I don’t think momentum is going to kill it yet, but momentum does what momentum does, which is look for the higher flight,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.

The key difference between playing the stock market and Mario Kart is that the latter is a zero-sum game (you lose if your friend wins), but that’s not always the case with the former. You can own both Nvidia and Broadcom and profit regardless of the race leader.

— CNBC’s Ari Levy, Samantha Subin, Brian Evans and Jess Pound contributed to this report.