Chip and betting stocks diverge as analyst calls drive early market moves
U.S. stocks start the week with gains after a losing stretch, but several individual names are moving in different directions before the open. Semiconductor shares are mixed while DraftKings comes under pressure from a UBS downgrade tied to regulatory concerns around prediction markets.
Highlights
- Nvidia falls nearly 5% premarket as it investigates CEO Jensen Huang's relationship with Alice Huang, amid U.S. intelligence concerns about Chinese espionage links.
- AMD rises 3.2% after Oppenheimer upgrades it to outperform, sets a $600 price target, and raises future revenue and EPS estimates following a strong Q3.
- DraftKings drops as UBS downgrades to neutral, cuts its target to $22 from $48, and cites lower 2026 revenue guidance and $1 billion potential losses through 2027 due to regulatory uncertainty.
Premarket moves in chips and online betting
As reported by CNBC, Nvidia falls in premarket trading after scrutiny intensified around CEO Jensen Huang's relationship with Alice Huang, a businesswoman that U.S. intelligence agencies allegedly link to Chinese espionage concerns. The company also opens an investigation into the relationship, while reports cited from The New York Times and the Financial Times say Alice Huang is affiliated with cloud company and Nvidia customer Megaspeed.Even with Nvidia down nearly 5%, other semiconductor names hold up better in early trading. AMD shares rise 3.2% after Oppenheimer upgrades the chipmaker to outperform from market perform and sets a price target of $600 per share.
Oppenheimer analyst Rick Schafer says he becomes more bullish after AMD reports a strong third quarter last week. The firm also raises its estimates for future revenue and earnings per share.
Regulatory concerns weigh on DraftKings outlook
DraftKings slips after UBS downgrades the stock to neutral from buy and cuts its price target to $22 from $48. Analyst Robin Farley points to an uncertain regulatory outlook in prediction markets, saying that makes it harder to value the company's core business on its own.UBS also notes that DraftKings recently lowers its core 2026 revenue guidance while forecasting roughly $1 billion of prediction market losses through 2027. The move highlights how regulatory risks remain a key factor for online betting companies as investors assess longer-term earnings visibility.
Our earlier Nasdaq 100 update highlighted a sharp pullback driven by weakness in AI-linked stocks as investors worried that higher interest rates could curb investment across the sector. We also noted that technical signals were firmly bearish, with the index trading below key moving averages and a high likelihood of consolidation or further downside unless key resistance levels were reclaimed.
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