Roundhill Investments CEO Dave Mazza and Yorkville Ives Partner Dan Ives: Nvidia Turmoil and Data Center Restrictions Boost Value of Compute and Alternative Chips
Two AI-themed ETF managers believe that the trust crisis triggered by Nvidia CEO Jensen Huang's resignation, combined with tighter regulation of data centers following the Democratic Party's control of Congress in the United States, has increased the value of existing compute assets through supply constraints. This benefits hyperscale cloud service providers and alternative chip suppliers such as AMD.
In the week when Nvidia founder and CEO Jensen Huang resigned, AMD shares rose nearly 13%, Broadcom posted similar gains, and the Nasdaq Composite recorded its best single-week performance since August. When one company encounters trouble, the entire sector strengthens—a seemingly contradictory market reaction that two AI-themed ETF managers view as an investment thesis worth explaining, rather than simple panic-driven rotation.
Dave Mazza, CEO of Roundhill Investments, proposed a core mechanism on CNBC's "ETF Edge": if investors lose trust in Nvidia, they will not stop buying AI chips but will instead turn to other suppliers for compute power. This means Nvidia's trust crisis creates a window for demand transfer to competitors in the short term. The Magnificent Seven ETF (MAGS) managed by Mazza closed the week up less than 1%, while the Roundhill Neocloud ETF (NCLD), which focuses on small- and mid-cap specialized cloud computing companies, rose more than 1%, despite having fallen cumulatively by 39% since its launch in August 2026.
Mazza further pointed out that hyperscale cloud service providers may benefit from Nvidia's difficulties because they already possess available compute infrastructure. With demand remaining constant and new supply constrained, the value of existing compute capacity rises.
Dan Ives, partner at Yorkville Ives, added a political dimension to the analysis. Following the U.S. midterm elections on November 3, 2026, where the Democratic Party gained control of Congress, Ives estimated that this political shift could prevent 10% of planned data centers from being built, with high-end estimates ranging from 15% to 20%. However, his conclusion was not bearish on AI compute; rather, he reasoned inversely: given that demand still exceeds supply by approximately four to one, tighter regulation makes existing compute scarcer and therefore more valuable. Before Nvidia's Q3 earnings report, Ives lowered his price target on Nvidia from $300 to $225 but maintained a buy rating, arguing that a valuation of roughly 10 times 2028 earnings per share remains too low.