Nvidia Rallies in Frankfurt Even as Chip Index Sinks into Bear Market
Published on 07/20/2026 at 15:42 | Redaktion boerse-global.de
Nvidia shares climbed 1.59% to €180.28 in Frankfurt trading on Monday, standing in stark contrast to the broader semiconductor sector's slide into bear territory. The Philadelphia Semiconductor Index has fallen roughly 20% from its June 22 high, dragged down by the unveiling of Kimi K3, an open-source AI model from Chinese startup Moonshot AI that boasts 2.8 trillion parameters. While the sell-off has erased about $1 trillion in market value from the chip sector, Nvidia's stock remains 8.84% above its 200-day moving average — a sign that the medium-term uptrend is still intact, even if the shares are nearly 11% below their 52-week peak.
The bearish reaction to Kimi K3 reflects fears that cheaper, non-U.S. AI models could undermine the pricing power of American chip suppliers. Yet several analysts argue that the model's enormous memory requirements — over 1.5 terabytes of HBM and at least 64 linked chips for efficient inference — actually plays into Nvidia's hands. Researchers at SemiAnalysis invoke the Jevons paradox, reasoning that falling inference costs will expand overall AI usage and ultimately drive greater hardware demand. Oppenheimer echoed that view by placing Nvidia second on its "Best of Best" momentum list on July 19, while Hwang Su-uk at Meritz Securities noted that open-source models like Kimi K3 further stimulate GPU demand through infrastructure providers such as Fireworks AI. JPMorgan has called the rout a "compelling tactical opportunity," maintaining an overweight rating on chip stocks and pointing to tight DRAM and NAND supply that could persist through 2028.
The timing of the sell-off briefly allowed Apple to reclaim the title of the world's most valuable company on July 19, but Nvidia fought back to finish the day with an $11 billion lead. The back-and-forth has fueled investor debate over whether the AI spending cycle is peaking. Against that backdrop, Nvidia has been accelerating its international expansion. Jensen Huang visited Tokyo in mid-July, striking deals to build a "Vera Rubin AI Factory" with Japanese partner Noetra — a project involving 13,750 Vera CPUs and 27,500 Rubin GPUs — as well as robotics collaborations with Fanuc, Yaskawa and Kawasaki. The broader Noetra initiative encompasses 44 Japanese companies and roughly $6.2 billion in sovereign AI infrastructure investments, with the Vera-Rubin facility scheduled to go live in 2028.
Should investors sell immediately? Or is it worth buying Nvidia?
Beyond Japan, Nvidia continues to land massive orders. SpaceX, through contract manufacturer Foxconn, has placed a $52 billion order for 13,000 racks of Nvidia GB300 AI servers slated for delivery between the fourth quarter of 2026 and the first quarter of 2027. Meanwhile, contract chipmaker TSMC posted a 77% jump in second-quarter net profit to $22 billion and announced an additional $100 billion investment in Arizona, bringing its total U.S. commitment to $265 billion — reinforcing the industry's capacity expansion narrative.
Fundamentally, Nvidia's momentum remains robust. In the first fiscal quarter of 2027, revenue surged 85% to $81.6 billion, with the data-center segment climbing 92% to $75.2 billion. Adjusted earnings per share of $1.87 beat the consensus estimate of $1.76, and the company guided for roughly $91 billion in current-quarter revenue — a 96% year-over-year increase. A quarterly dividend of $0.25 and an $80 billion buyback program underpin shareholder returns. Huang has also projected that global data-center investment could reach $4 trillion by 2030, a scenario that could theoretically lift Nvidia's market capitalization from roughly $5 trillion today to $20 trillion.
Wall Street remains overwhelmingly bullish. The average analyst price target hovers near $302, with KeyBanc recently lifting its target to $330 and Baird setting the high bar at $500. Institutional investors have been adding exposure: Munich Re increased its Nvidia stake by 12.5% in the first quarter, holding over 1.15 million shares worth $200.9 million. On the other hand, insiders have sold $410.6 million worth of stock over the past three months with zero purchases, a pattern that some traders watch for signs of caution. The next major catalyst comes later this month, as Microsoft, Meta, Amazon and Alphabet report quarterly results starting July 22. Microsoft, Nvidia's largest customer accounting for 22% of revenue, will be closely watched for cloud-growth trends and capital-expenditure plans. Nvidia itself reports on August 26, and the stakes have rarely been higher.
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