Jensen Huang resigned as Nvidia chief executive on Thursday, and the stock fell as much as 14 percent at the open before steadying. Nvidia said its co-founder was stepping down as president, chief executive and director, effective immediately, after reports of affairs, including one with a woman suspected of spying for China. The shares closed down 4.34 percent at 166.19 dollars, after hitting a 52 week low in the early trading.
Why it matters
The wider market held up better than the single stock panic suggested. The S and P 500 slipped only 0.35 percent to close at 7,592, helped by gains in Nvidia rivals, while the Nasdaq Composite fell about 0.4 percent and the Dow lost almost 190 points. The split showed that investors treated the shock as a Nvidia problem first and a market problem second, at least for one session.
The board moved fast to fill the gap. Chief financial officer Colette Kress is interim chief executive while the board searches for a permanent successor, and Harvey C. Jones becomes the board first chair, a role the company had never filled before. Nvidia still plans to report earnings on November 17, with revenue guidance of 108 billion dollars, plus or minus 2 percent.
What happens next
Washington wants answers next. Senate Banking Committee Chairman Tim Scott asked Huang and Commerce Secretary Howard Lutnick to testify, according to Reuters, and Huang has agreed to brief House lawmakers before Thanksgiving, with the date still under negotiation. The board has said it has no reason to believe that either national security or Nvidia secrets were compromised, and Beijing has denied that there was any Chinese plot to spy on Huang.
For now, the market is waiting on two dates. The October Producer Price Index lands at 8:30 a.m. Eastern Time on Friday, and Nvidia reports earnings on Tuesday. The first will test the Federal Reserve case for a December rate hike, and the second will be the first results presentation without Huang at the helm.
The board has hired Wachtell, a firm known for boardroom battles, to advise on the probe, and the governance questions are now as important as the business. Huang is 63, the company largest shareholder with about 3.6 percent, and one of the richest people in the world after building Nvidia into the centre of the AI boom. The circular financing deals, in which Nvidia pumps cash into its customers to fuel more chip sales, are now under scrutiny alongside the leadership question.
