Jensen Huang’s resignation as Nvidia CEO on Thursday sent the company’s shares lower as investors and analysts weighed what comes next for the AI giant.
Huang, who co-founded Nvidia in 1993, stepped down after reports surfaced of two extramarital relationships. One was reportedly with a Chinese businesswoman whom U.S. officials suspect of spying for Beijing, prompting an investigation by Nvidia’s board. The company named longtime CFO Colette Kress interim CEO.
Nvidia stock fell about 14% from Wednesday’s close, reaching an intraday low of $148.80 before recovering some ground. By early afternoon, shares were down 4.3%.
Bret Kenwell, a U.S. investment analyst at eToro, said Huang had helped make Nvidia “the crown jewel of the AI trade.” He was more than a CEO, Kenwell said; investors had also viewed him as part of the case for owning the stock. That could lead to closer scrutiny of Nvidia’s earnings report next week.
Kenwell said the results were already likely to draw attention, but the leadership uncertainty would put them under an even brighter spotlight. Investors will be looking for signs of stable demand and reasons to feel confident about the company, he said.
Other technology firms may try to benefit from Nvidia’s upheaval, Kenwell added, but the leadership questions do not change the company’s standing as a leading technology business in a period of major industry change.
James McCann, senior economist for investment strategy at Edward Jones, said technology and AI stocks have been unusually volatile. The Nasdaq has risen or fallen by more than 1% on seven of the past 10 trading days.
McCann said uncertainty over Nvidia’s leadership could intensify those swings. Huang was a prominent symbol of the AI boom, he noted, and the company has no clearly established succession plan. Nvidia has also played a major financial role in supporting other parts of the AI sector. McCann said the stock’s movements after Huang’s departure reflected those concerns.
Still, he said, Nvidia’s underlying business fundamentals have not changed. It remains unclear whether a change at the top will significantly affect the company’s strategy or its ability to carry it out.
McCann said Edward Jones continues to caution investors against holding too much of their portfolios in technology stocks. Instead, he recommended a diversified mix of large- and mid-cap U.S. stocks that suits each investor’s goals and tolerance for risk.
Dan Ives, a partner and senior managing director at Yorkville Ives, said Huang’s departure ends the image of him as the “Godfather of AI” and the public face of the industry’s boom. He described the move as a chance for Nvidia’s board to begin a new chapter without Huang after a difficult period for both him and the company.
Ives said his firm remains optimistic about Nvidia, with an outperform rating and a $225 price target. Nvidia, he said, remains the clear leader in graphics processing units for AI and is roughly two to three years ahead of its closest rival. He added that expected demand over the next few years is unlikely to change simply because Huang has left.
Ives also noted that Nvidia has a strategic plan built around its next generation of chips, which the company hopes will continue to support the AI boom. His firm’s outlook accounts for pressure and scrutiny related to Nvidia’s China business and possible gaps in export controls, he said, adding that those concerns are already reflected in the stock’s current valuation.
