Melius: Nvidia’s gap with chip stocks may narrow

The data point that Nvidia rose 31% while the semiconductor ETF gained over 90% underscores a significant divergence, suggesting the market has already priced in substantial AI-driven growth for Nvidia, while broader chip names may be catching up on cyclical or diversified demand. Melius's view implies that relative performance, rather than absolute gains, is the key metric here—a narrowing gap would signal a rebalancing of investor expectations across the sector. What matters next is whether this convergence stems from Nvidia's momentum slowing or from other chipmakers accelerating, as that would reveal if the AI trade is maturing or merely rotating. The observation is notable for portfolio positioning, but the open question is whether the gap closes through Nvidia's underperformance persisting or through a broader sector rally.