Smart Investor What’s Next: Nvidia Falls 12% After Huang Exits
Nvidia shares dropped more than 12% in a week after CEO Jensen Huang resigned, yet US stocks still rose. Hot inflation data, Nvidia's earnings report and what could be the largest IPO in history, from Anthropic, now shape what investors watch next.
Nvidia's stock fell more than 12% this week after chief executive Jensen Huang resigned amid investigations into his relationship with an alleged Chinese agent. For any smart investor, what’s next hinges on Nvidia's earnings report and one of the biggest stock market debuts on record.
The wider market barely flinched. The Morningstar US Total Market Index gained more than 2.5% for the week, led by energy stocks.
Nvidia under pressure
Nvidia is no ordinary chipmaker. It has played a central role in the AI boom, and its shares sit in many Americans' portfolios.
Brian Colello, a senior equity analyst, sharply cut his fair value estimate for Nvidia, by 19%, late in the week. He cited the CEO transition and turmoil at the company.
Questions also loom over a possible data center slowdown after the midterm elections. Colello flagged leadership, China and data center concerns as the issues to watch when Nvidia reports earnings, which is expected in the coming days.
Anthropic's IPO
Anthropic executives are on the road pitching investors on an initial public offering that could be the largest in history. Pricing is slated for later in the coming week.
Analyst Malik Ahmed Khan has gone through the company's S-1 filing, the document that discloses its finances to regulators. He thinks the stock is undervalued in the IPO pricing range, meaning the company is pricing it cheaply.
Dan Lefkovitz of Morningstar Index said the listing will not dramatically alter the stock market. It will, however, make an already top-heavy, tech-heavy market more concentrated.
Inflation and the Fed
The October Consumer Price Index came in hotter than expected. Analysts say that, together with a recent strong jobs reading, the Federal Reserve could tilt toward more interest rate increases than previously expected, with hikes seen in 2027.
Earnings season winners
With earnings season winding down, a quarterly screen found seven undervalued stocks that crushed earnings. Arista and GE Vernova are on the list.
Moderna ranks among the stocks with the largest increases in fair value estimates during the season. ServiceNow and Nike were among those with the largest valuation cuts.
Nvidia reports first, in the coming days. Anthropic's pricing follows later in the same week.
