Clarity Arrives for Pair of Big-Name Chip Stocks

Recently, some clarity emerged on Nvidia (NASDAQ: NVDA) and Taiwan Semiconductor (NYSE: TSM) — two of the most important names in the semiconductor industry.

That could prove to be good news for the related exchange traded funds, including the VanEck Semiconductor ETF (SMH). The $9.7 billion SMH is highly pertinent in this conversation because Nvidia and Taiwan Semiconductor are the ETF’s two largest holdings. They combine for just over 31% of its roster.

Last week, Nvidia slipped 7.66% amid some social media speculation regarding one of its customers. Making a long story short, unfounded rumors surfaced that CoreWeave –a company in which Nvidia is invested — is no more than shell company. However, analysts, including Bernstein’s Stacy Rasgon, defended Nvidia while debunking the conspiracy theories surrounding CoreWeave.

CoreWeave started out as a cryptocurrency company. It is now transitioning to cloud computing. That might be fueling wild thoughts, be they unfounded, among some market participants.

“Beyond somewhat hilariously confusing ‘Blackstone’ with ‘Blackrock’ during the process, this is also nonsense. Nvidia did not need help from CoreWeave (or anyone) to juice the quarter (their products are all on allocation), and the [CoreWeave] debt facility was announced August 3 (after the quarter was completed) with the release suggesting deployment has likely not happened yet,” wrote Ragson.