Alphabet Boosts AI CapEx, But NVIDIA Falls 0.7% as Funds Rotate to Memory, Chip Suppliers

According to Alphabet's earnings release on Thursday, the company delivered better-than-expected results and significantly raised capital expenditure (CapEx) guidance for AI infrastructure investment. However, NVIDIA shares fell 0.7% in pre-market trading Thursday, while memory and chip supply-chain peers rallied sharply: Micron rose 2% and SK Hynix jumped 5.2%, signaling a rotation away from the GPU leader.

Analysts attribute NVIDIA's underperformance to market dynamics. With a market capitalization now among the world's largest, NVIDIA is increasingly treated as a "Big Tech" stock rather than a pure semiconductor play, making it a profit-taking target during portfolio rotations. Investors are reallocating capital to smaller-cap AI supply-chain players with more attractive valuations. Large tech peers also declined: Amazon and Meta fell roughly 2% each in pre-market trading, reflecting a broader shift from mega-cap tech toward chip and memory suppliers.