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Nvidia shares sink 9% amid reports of possible CEO Jensen Huang ouster
Nvidia Corp. stock sank in extended trading Wednesday as investors grappled with the possibility of the company without CEO Jensen Huang at the helm.
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Nvidia Corp. stock sank in extended trading Wednesday as investors grappled with the possibility of the company without Chief Executive Officer Jensen Huang at the helm.
Shares fell 9% as of 5:30 p.m. 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. With the vendor financing and the aggressive tactics, his successor will spend the next year putting out fires and cleaning up messes.”
“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,” he added.
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 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 organizational structure. The gap in judgment maybe hard to repair with critical clients."
