Apple and Meta ditch Nvidia for custom chips — ride the AI spin-off trend
Thesis
The news highlights a major shift in the AI landscape: Nvidia's $1 trillion slide has pushed its valuation to multiyear lows, but rather than just bouncing back, the market is rewarding companies reducing their reliance on Nvidia. Apple's massive $30 billion deal with Broadcom and Meta's successful development of custom AI chips show that big tech is pivoting toward in-house solutions. Connecting Nvidia's struggles with Apple and Meta's aggressive chip strategies reveals a clear rotation trade—investors are selling the established AI chip monopoly and buying the tech giants building their own independent AI infrastructure.
Strategy approach
Build a rule-based long-only strategy on AAPL and META. Use a daily (D1) timeframe. Entry condition: AAPL or META makes a new 10-day high while NVDA closes down on the same day (divergence signal). Exit condition: 10% profit target or close below the 20-day moving average, with a maximum hold of 20 trading days. Allocate equally if both trigger simultaneously.