The leadership crisis at Nvidia, the world's most valuable semiconductor company and the engine of the artificial intelligence boom, escalated sharply on Wednesday when its shares tumbled in late trading on a report that the board is preparing to remove co-founder and chief executive Jensen Huang.
Nvidia shares fell more than 8% to about $159.50 in after-hours trading on November 11, according to CBS News, after the Wall Street Journal reported that the board was moving towards ousting Huang. The stock had closed the regular session at $173.73, according to 24/7 Wall St., after a rebound earlier in the day. At the after-hours price, Nvidia's market value stood at roughly $3.85 trillion, about $347 billion below Wednesday's close.
The slide extends a dramatic week for the company. Since Nvidia disclosed on November 8 that its board had opened an investigation into Huang's conduct, the stock has lost more than $450 billion in market value, CBS News reported.
How the crisis unfolded
The turmoil began on Sunday, November 8, when Huang told employees in an email that he had been unfaithful to his wife. The board opened an independent investigation the same day and said it had confidence in him, according to 24/7 Wall St.
The probe is examining reports that Huang may have been the target of a foreign intelligence operation. US intelligence agencies have linked Huang to Chinese business executive Alice Huang, who is not related to him and whom US officials suspect of being an asset of China's Ministry of State Security, CBS News reported. China has called the claim groundless, and Huang has not been accused of any crime. The board has hired Joon Kim, a former acting US attorney, and the law firm Wachtell, Lipton, Rosen & Katz, and has said it has no reason to believe national security or company secrets were compromised.
The pressure intensified on Wednesday after the New York Times reported that Huang had also had a relationship with a senior Nvidia executive, according to 24/7 Wall St. Nvidia has not publicly commented on that report.
A rare downgrade
Before the Journal's report, Wall Street had already begun to sour on the stock. Baird analyst Tristan Gerra downgraded Nvidia to neutral and cut his price target to $200 from $500, according to The National. The downgrade was described as rare for a stock that has been one of the most widely recommended on Wall Street.
Gerra cited both operational and leadership concerns. He delayed his 2027 data centre forecasts, saying supply issues are "mostly behind a potential slowdown, alongside potential demand softening," and suggested that growth in AI capital expenditure by large cloud providers could slow to around 40% or slightly less in 2027. Baird analysts said that a new leader, likely from outside the company, is needed "to re-establish trust both externally and internally."
Morgan Stanley analyst Joseph Moore removed Nvidia from his list of top picks, while keeping an overweight rating and a $300 price target, according to TheStreet. Moore said Huang's leadership is "crucial to the company's direction," The National reported.
Wedbush analyst Dan Ives estimated a 15% chance that Huang would be removed as chief executive, and said that if that happened, Nvidia would be "worth a lot less (25 per cent to 30 per cent) as a company/stock," according to The National.
Why Huang matters so much
Huang co-founded Nvidia in 1993 and has led it for more than three decades, transforming a maker of graphics chips for video games into the dominant supplier of the processors that train and run AI models. He is widely seen as the face of the AI industry, and his relationships with technology chief executives, governments and customers are considered central to Nvidia's commercial success.
That is why investors are so sensitive to any change in his position. Nvidia's chips, software platform CUDA and networking products underpin the data centres being built by Microsoft, Amazon, Alphabet, Meta, OpenAI and a growing roster of specialist cloud providers. A leadership vacuum at a moment of intense competition from rival chipmakers and in-house chips developed by its biggest customers could unsettle that ecosystem.
