Jensen Huang's resignation from Nvidia has sparked significant criticism, particularly from CNBC's Jim Cramer, who accused him of betraying shareholders. Huang's departure comes amid reports of multiple affairs and potential investigations into his conduct, which could impact Nvidia's international business due to possible violations of U.S. chip export restrictions.
Following the news, Nvidia's shares fell over 4% on Thursday, with a peak decline of more than 14%, marking a 12% drop for the year. Cramer emphasized the need for new leadership, suggesting that interim CEO Colette Kress could implement a more disciplined investment strategy, potentially leading to increased shareholder returns through stock buybacks.
Despite the turmoil, Cramer noted Nvidia's strong underlying business and cash reserves, but he warned that even strong earnings reports might not alleviate investor concerns during this period of uncertainty. He also highlighted the competitive landscape, with companies like Advanced Micro Devices making strides in AI chips, which could threaten Nvidia's market position.
Cramer advised investors to consider taking profits from Nvidia shares, especially given the recent downgrades from analysts, while also suggesting that Nvidia could still thrive under new management, drawing parallels to Apple's transition from Steve Jobs to Tim Cook