Nvidia shares fell 2% in early trading on Friday, following a more than 4% drop the previous day, largely due to the resignation of CEO Jensen Huang amid allegations of extramarital affairs. This week, the stock has dropped 13%, marking its worst weekly performance since April 2025 if the decline persists.
Analysts, including Truist's William Stein, suggest that the implications of Huang's departure extend beyond personal issues, potentially affecting Nvidia's corporate culture and revenue prospects. Stein downgraded Nvidia from a 'buy' to 'hold' and reduced his price target from $346 to $174, indicating only a 4.7% upside from the stock's recent close.
Additionally, concerns have arisen regarding Nvidia's involvement in shipping GPUs to entities in China, which could complicate future revenue streams and revive U.S. efforts to restrict semiconductor exports to China.
JPMorgan analyst Erica Spear noted that the fallout from the scandal may have broader implications for U.S.-China relations and regulatory scrutiny, especially with a new Congress set to take office in January