NVIDIA Stock Stumbles Despite 85% Revenue Growth – Semiconductor Sector Rises Without Chip Giant

NVIDIA remains behind the current rally in the semiconductor sector despite posting 85 percent revenue growth in the latest quarter. While the AI chip manufacturer from Santa Clara continues to deliver impressive figures, institutional investors have reduced their positions – a pattern that according to Invezz on June 22, 2026 is hard to ignore.

Micron Overtakes NVIDIA in Earnings Growth

On June 24, 2026, Micron Technology released quarterly results that eclipse even NVIDIA's best growth phases. The memory chip manufacturer recorded earnings growth of 1215 percent compared to the prior-year quarter. According to Zacks, NVIDIA – despite its dominance in the AI chip market – never achieved these growth rates even in its strongest quarters.

The figures illustrate a shift in the semiconductor industry. While NVIDIA is considered the leading AI chip manufacturer and continues to provide solid guidance, other segments of the sector are benefiting disproportionately from the boom in memory technology and diversified demand.

Institutional Investors Betting on Diversification

Invezz reported on June 22, 2026 that so-called "smart money" – a term for institutional investors – is reducing NVIDIA positions while the rest of the semiconductor sector is rising. The phenomenon seems paradoxical: NVIDIA continues to deliver blockbuster quarterly results and leads in revenue development in the AI space.

One possible explanation lies in market valuation. After several years of strong price gains, NVIDIA may have reached a level at which institutional investors are taking profits and shifting into cheaper alternatives within the semiconductor sector. Specific data on portfolio shifts has not been published.

NVIDIA Stock Under Pressure

On June 22, 2026, NVIDIA stock traded slightly lower in early trading. According to Barron's, investors on that day assessed news regarding US-Iran peace talks – a geopolitical factor that can indirectly influence technology stocks, but is not directly related to NVIDIA's operational business.

The price movement contrasts with the fundamental developments. NVIDIA had reported 85 percent revenue growth in the latest quarter and issued positive guidance for the coming months. Nevertheless, the stock lags behind competitors such as Micron, Broadcom and other semiconductor manufacturers.

Hidden Double Exposure in Tech ETFs

Investors holding broadly diversified technology ETFs often hold NVIDIA multiple times. The Technology Select Sector SPDR Fund (XLK) weights NVIDIA, Apple and Microsoft with substantial portions. According to 24/7 Wall St. from June 23, 2026, the fund's expense ratio is low, but the concentration on a few mega-caps leads to indirect double-counting exposure.

Those who simultaneously invest in the S&P 500 and the XLK automatically hold the three mentioned companies twice – once through the broad market index, once through the sector ETF. This constellation amplifies concentration risk, particularly when individual stocks like NVIDIA consolidate after prolonged price increases.

AI Chip Sector Under Watch

In early June 2026, AI chip stocks came under pressure after Broadcom issued guidance that fell short of analyst expectations. The Motley Fool reported on June 8, 2026 that the chip and network specialist disappointed investors with its outlook. The weakness affected the entire sector – a pattern that also hit NVIDIA, even though the company itself sent no negative signals.

NVIDIA CEO Jensen Huang has repeatedly emphasized in the past a long-term focus on AI infrastructure – an attitude reminiscent of Warren Buffett's principle of patient investing. However, in the short term, the stock remains vulnerable to sector sentiment and macroeconomic uncertainties.

Outlook for Semiconductor Investors

The current market situation shows: NVIDIA remains operationally strong but is losing relative attractiveness compared to competitors with higher growth rates or cheaper valuations. Micron's quarterly results from June 24, 2026 underscore that other segments of the semiconductor sector can benefit disproportionately – particularly in memory, which benefits from rising demand by AI data centers.

For investors in the DACH region who are invested in ETFs like the XLK or holding direct positions in NVIDIA, a review of portfolio weighting is advisable. Concentration on a few mega-caps can lead to increased volatility during consolidation phases. Diversification within the semiconductor sector – such as through adding memory chip or equipment manufacturers – could spread risk without sacrificing the growth potential of the industry.