How Nvidia turmoil and a Democratic Congress could reshape the AI trade, according to ETF experts

The artificial intelligence trade landscape is undergoing significant reshuffling following Nvidia's recent turmoil, which includes the resignation of its iconic founder and CEO Jensen Huang. As investors reassess the AI chip market, other players are positioned to benefit from potential trust issues with Nvidia, while a Democratic-controlled Congress may slow data center expansion.

Nvidia's interim CEO and current chief financial officer Colette Kress will have her first opportunity to reassure the market when the company reports its third-quarter earnings next Tuesday. "Our focus remains on serving our customers, partners, developers and shareholders," Kress said in a statement issued on Thursday morning when the company announced Huang's exit.

Competitors gain ground

Investing experts suggest that other AI chip players could fill the void if investor confidence in Nvidia continues to waver. AMD finished the week up nearly 13%, with Broadcom posting similar gains, as the tech-heavy Nasdaq posted its best week since August.

"If we get into an environment where people can't trust … Nvidia, they're going to look for other sources for these chips because they need them," said Dave Mazza, CEO of Roundhill Investments, whose firm manages the Magnificent Seven ETF (MAGS).

Congress impact on data centers

The Democratic Party's gains in the November 3 elections have raised concerns about potential slowdowns in data center expansion. Analysts estimate that 10-20% of planned data centers may not materialize due to increased regulatory scrutiny.

Dan Ives of Yorkville Ives projects that while demand still outstrips supply four to one, the "blue tidal wave" in Congress could significantly impact the data center buildout. "The compute is just that much more valuable in the capacity today than it was a week ago," Ives noted.

Despite potential slowdowns, Ives maintains that there are no overbuild or bubble concerns in the sector. "The game is going to change for Big Tech. It will slow it down. But there's no overbuild, no bubble concerns. And I view that as actually a positive thing," he added.

ETF performance mixed

The Roundhill Magnificent Seven ETF ended the week with a modest gain of less than 1%, while the Roundhill Neocloud ETF was up over 1%. However, the neocloud ETF remains deeply in the red since its August 2026 launch, down 39%, amid concerns about balance sheet strength.

CoreWeave had its best day since April 2025 on Wednesday after its latest quarterly results, while Nebius shares sank after its Thursday report. These mixed results reflect the uncertainty in the AI infrastructure space following Nvidia's leadership shakeup.

Yorkville Ives lowered its price target on Nvidia to $225 from $300 after Huang's resignation but maintained a buy rating on the stock, which finished the week at $162.85 per share. "Nvidia remains the clear leader in GPU chips for the AI Revolution," Ives wrote in a note to investors, emphasizing the company's 2-3 year lead over competitors.