Nvidia shares experienced a significant decline after the company's board convened to discuss the potential ousting of CEO Jensen Huang, who admitted to having an affair with Alice Huang, an executive at Megaspeed, a company under scrutiny for alleged ties to Chinese espionage. Additionally, reports surfaced of another affair with Kimberly Powell, Nvidia's vice president of health care.
This turmoil has led to a 20% drop in Nvidia's stock over the past month, and analysts predict that Huang's removal could trigger an additional 20% decline. Bernstein cut its price target for Nvidia from $400 to $200, reflecting concerns over leadership continuity.
Analysts emphasize Huang's critical role in Nvidia's transformation into a leader in artificial intelligence, raising questions about who could effectively replace him. U.S. lawmakers have also called for his resignation, further complicating the situation.
Richard Reyle, chief investment officer at Questar Capital Partners, noted that Nvidia lacks a succession plan, making the stock potentially uninvestable amid ongoing leadership uncertainty