Chip stocks rally 7% even as Nvidia falls, leaving a recovery test for the AI trade

Chip stocks surged on November 9, 2026, without Nvidia joining the recovery. The Philadelphia Semiconductor Index gained 7% and the Nasdaq-100 rose 3.4%, while Nvidia fell 4.3%. The split followed weeks of selling in AI-linked shares, leaving investors with a sharp rebound but no clear proof of a lasting market bottom.

Nvidia lost about $200 billion in market value during the session, with roughly $80 billion worth of its shares changing hands. Its decline contrasted with the sector’s broad advance as investigations involving the company remained unresolved.

In his November 10 Market Memo, CNBC’s Michael Santoli argued that the rebound could begin a recovery, while warning against treating one strong day as confirmation. The effects of Nvidia’s investigations on China sales, leadership and long-term earnings power remain unclear.

A rebound after intense selling

Santoli’s case for a bounce rested partly on how much selling had already occurred. He cited trading desks reporting historically rare intensity of institutional net selling in technology hardware into Thursday’s retreat. Several measures showed the Nasdaq-100 as oversold as it had been at the March 30 selloff low.

Another sign of easing stress came from the CBOE Volatility Index, which had climbed to 28 before retreating below 20. Baird Strategas options strategist Laurent Laskowski described the recent decline as having many signs of capitulation: investors abandoning positions under pressure.

Laskowski pointed to record options activity, a sharp rise in volatility, increasingly synchronized price moves and forced liquidations. His interpretation was that the risk of an extreme downside move was narrowing while the scope for an upside move was growing—not that the market had already repaired its losses.

The recovery still has ground to cover

Santoli offered a specific technical checkpoint: a rebound should at least move above its 20-day moving average before being treated as more than a temporary bounce. Even after Monday’s gains, all three indexes he highlighted remained below that threshold, with the semiconductor benchmark furthest away.

1.3%S&P 500

Santoli calculated the additional gain needed from Monday’s close to move above the 20-day moving average.

3.7%Nasdaq-100

The technology benchmark needed a further 3.7% advance from Monday’s close.

9%Philadelphia Semiconductor Index

The chip index still needed another 9% gain despite Monday’s surge.

John Kolovos of Macro Risk Advisors supplied the more cautious interpretation. He described technology stocks as being in a “bad oversold” condition, where tempting rebounds fail to establish lasting lows. In his view, broader market losses and a more widespread investor surrender might still be needed before a durable bottom forms.

Cheaper earnings, less convincing cash flow

Beyond the trading signals, Santoli identified a valuation problem. Chip stocks’ valuations had fallen to multiyear lows amid persistent doubts that current profits could last. The group also remained exposed to any slowdown in data-center construction, making lower prices an incomplete answer to concerns about future demand.

His cash-flow comparison extended that concern to the broader S&P 500. Semiconductor profits were supporting projected index earnings, but heavy spending by the largest cloud companies meant less of those earnings would become free cash flow. On that measure, he argued, the market looked less cheap than earnings-based valuations suggested.

Santoli’s possible longer-term bull case depended on Alphabet, Amazon, Meta and Microsoft resuming stronger cash generation, with investors valuing that cash more highly than chipmakers’ uncertain earnings. He presented it as an unproven argument, rather than an outcome Monday’s buying had established.