Krispy Kreme Is Beating Nvidia, and That’s Not Even the Chip Giant’s Biggest Problem

Just how badly is the tech sector getting hammered in this post-midterm stock market reckoning? Well, put it this way: If you’d bought Krispy Kreme at the start of the year, you’d be doing better than someone who YOLOed their way into Nvidia at the same time, convinced the AI bubble could never burst. For all the hype and bluster that has surrounded artificial intelligence and the massive infrastructure buildup around it, Nvidia sits just below where it started the year, at about $187 per share as of Friday afternoon. That’s well off the 52-week high of $243.37 that it hit back on October 6, and to be fair, the chipmaker was still sitting in the black for the year before the market sell-off that followed the midterms. By contrast, if you went long into the pastry market and had diamond hands (sticky fingers?) for Krispy Kreme, you’d be sitting mighty pretty. The donut maker has, for whatever reason, skyrocketed this week even as the tech sector took a hit—presumably because the opposite of chips is fried dough. Its stock jumped nearly 31% on Thursday, hitting $5.03 per share before giving back some of those gains Friday. (The real reason is apparently that the company is expanding its franchising model and reported better-than-expected quarterly earnings.) Another benefit of Krispy Kreme: It’s not facing down increased government scrutiny (probably). Bloomberg reported Friday that as Democrats gear up to take over the House and Senate, they’re staking out some big targets for investigations and potential regulatory crackdowns, and Nvidia is on the list. Per the report, the incoming Democratic majority will be particularly interested in whether Nvidia has done enough to keep its advanced AI chips from falling into the hands of U.S. adversaries. Notably, the New York Times recently reported that Nvidia CEO Jensen Huang was the apparent target of a Chinese espionage operation involving an executive at one of its customers. And he may have to answer some questions about that whole ordeal sooner rather than later: On Thursday, three Republican House committee chairs requested a closed-door briefing with Huang to be held on November 18 to discuss the alleged operation and Nvidia’s safeguards against foreign espionage. In general, though, it seems the market expects that Big Tech is going to be under a microscope come January. For the last few days, tech stocks across the sector have been taking a beating, as fears of tougher scrutiny compound existing doubts about the industry’s trillion-dollar data-center buildouts. That doesn’t mean the hyperscalers are about to hit the brakes, but their executives may soon find themselves hauled before Congress to explain what they’re doing. With how frequently tech CEOs may soon find themselves stuck in conference rooms and government offices, they’ll definitely need some donuts. Krispy Kreme, anyone?