Nvidia tumbles as investors consider future without CEO Jensen Huang
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Nvidia’s board is reportedly preparing to oust chief executive officer Jensen Huang, who admitted to having an affair with an alleged Chinese spy.
PHOTO: REUTERS
- Nvidia shares fell 9% after reports raised doubts about CEO Jensen Huang’s future, with investors worried about leadership and governance.
- The New York Times said Huang had a relationship with a direct report, and the Wall Street Journal said the board may be preparing to oust him.
- Nvidia faces pressure before its Nov 17 results, as analysts say any removal could hurt client trust and force a more traditional structure.
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Nvidia stock sank in extended trading on Nov 11 as investors grappled with the possibility of the company without chief executive officer Jensen Huang at the helm.
Shares fell 9% as at 5.30pm in New York.
The stock began to fall in postmarket trading following a New York Times report that the CEO had a relationship with a direct report.
Losses extended after Wall Street Journal reported Nvidia’s board is preparing to oust Huang, who over the weekend had admitted to having a separate affair with an alleged Chinese spy.
“It is going to be a very challenging situation,” said Michael O’Rourke, chief market strategist at Jonestrading.
“Jensen had forecast 70% sales growth this year (2026). With the vendor financing and the aggressive tactics, his successor will spend the next year putting out fires and cleaning up messes.”
He added: “If these allegations are confirmed by the independent investigation, one has to expect the board to remove him. That is the standard for corporate governance today. Even worse this is a pattern.”
Nvidia shares have been under pressure amid growing concern around the strength and longevity of the artificial intelligence trade.
Nvidia is scheduled to report quarterly results on Nov 17.
It “will be interesting how it handles next week’s earnings call. Their CFO (chief financial officer) can handle the numbers but markets will want more on changes to the governance”, said Dec Mullarkey of SLC Management.
“It’s hard to imagine him stepping down but also hard to imagine how he could stay on. I think the board will ultimately be forced to push him out and establish a more traditional organisational structure. The gap in judgment may be hard to repair with critical clients.” BLOOMBERG