Nvidia Tumbles 7% After Hours as Investors Consider Huang Exit
Nvidia shares fell 7% in after-hours trading after a second report about CEO Jensen Huang's personal conduct. Reports say the board is preparing to remove him. The company has no clear successor, and investors face a long list of unknowns.
Nvidia (NASDAQ:NVDA) shares fell 7% in after-hours trading after a second report about CEO Jensen Huang's personal conduct, as Nvidia tumbles and investors consider a future without the man who has become the face of the AI boom.
The slide follows days of turmoil. Huang admitted to an affair with a suspected Chinese spy, which prompted an investigation by the company and calls for inquiries across the federal government. Lawmakers' concern centers on whether Nvidia may have violated chip export restrictions.
A second relationship
Then came a new report. It said Huang had a relationship with Kimberly Powell, Nvidia's vice president of healthcare, who reports directly to him. That relationship would appear to breach the company's code of conduct.
Nvidia's leadership met to discuss Huang's future with the company. A separate report said the board is preparing to remove him. Nvidia has not been quoted confirming that.
The stock fell on both days after Huang's first admission, recovered part of the loss, and then dropped again on the second report. It has lost a third of its value over the past month. Even after the latest drop, it is roughly flat from where it stood at the end of March.
No obvious successor
Huang is 63, and the company has no clear succession plan. Nvidia's board has a history of deferring to him. He also runs an unusually flat organization, with roughly 50 direct reports.
Nvidia has no chief operating officer and no chief marketing officer. Those jobs sit under the lesser title of executive vice president. Any replacement would take over a company built around one person.
Until recently, Nvidia was the most valuable company in the world. Its chips sit at the heart of the AI boom, with demand from labs, cloud giants and makers of physical AI. Huang has reached a level of fame that puts him alongside Elon Musk and Steve Jobs.
What investors cannot yet price
The unknowns are stacking up. If Huang is dismissed, nobody knows who would replace him or how the market would react to that person. Federal investigations could lead to fines, tighter oversight or stricter bans on Nvidia's exports.
Nvidia's technology lead is strong enough to support its dominance in the near term, according to the analysis behind this account. But the chip industry moves fast. Without Huang, the company's workhorse culture could drift and its execution could slip, leaving room for rivals.
One investor-focused assessment framed the decision for shareholders as risk management rather than forecasting. It argued that a large position in Nvidia could justify trimming given the uncertainty, while a small stake might reasonably be held for a rebound. That is one commentator's view, not a recommendation from JournalArta.
Nvidia's board has not publicly announced a decision on Huang's role.
