Nvidia Stock Plunges as Board Weighs Ousting Huang
The latest nvidia stock shock arrived after the closing bell on Wednesday, when shares in the artificial-intelligence chipmaker plunged in after-hours trading on reports that its board is preparing to remove Jensen Huang, the founder who has led the company for 33 years. The Wall Street Journal first reported on Wednesday afternoon that the board was preparing to meet as soon as that evening to determine Huang’s future with the company, and the news sent the stock down almost 10 percent at one point during extended trading. By 8 p.m. Eastern time the shares were trading 8.6 percent lower, erasing the gains of a regular session in which they had risen 2.9 percent. The fall capped a brutal week for the most closely watched name in the stock market today, and it raised the prospect of a leadership shake-up at one of the world’s most valuable companies at the very centre of the artificial-intelligence boom.
The report landed on top of a scandal that had already been building for days. On Sunday, Huang admitted to an extramarital affair with a woman whom American officials believe to be a Chinese spy, and he apologised to his wife and children the same day. The board announced an investigation into whether Huang was the target of a foreign intelligence effort, and it retained a former acting United States attorney for the Southern District of New York, Joon H. Kim, and his firm Wachtell, Lipton, Rosen and Katz to run it. Then on Wednesday, The New York Times reported that Huang had a second extramarital relationship, this time with a company executive, Kimberly Powell, Nvidia’s vice president of healthcare, who reports directly to him. The Journal’s report on the board followed within minutes. Two sources familiar with the matter told CNN that the board was meeting on Wednesday evening, with some expectation among Trump administration insiders that it would end with Huang’s ouster. As of Wednesday evening, no decision had been announced.
Nvidia Stock: The Sell-Off in Numbers
The market reaction was swift and severe. Nvidia shares had already fallen 9.5 percent across Monday and Tuesday after Huang’s weekend admission and the news of the board’s investigation, and the stock was down 27 percent from a peak in early October as of the close of trading on Wednesday, before the sharp after-hours decline. Estimates of the value destroyed this week varied between reports, but all of them ran into the hundreds of billions of dollars. One widely cited tally put the loss at about 700 billion dollars in market capitalisation so far this week, while another put it near 600 billion, and CBS News reported that more than 450 billion dollars in market value had vanished since November 8 alone. However the losses are counted, the scale is extraordinary: the world’s leading maker of AI chips has shed roughly a quarter of its value in a little over a month, and the stock was heading towards its sixth consecutive weekly decline.
The selling spread beyond the ordinary share market. Nvidia’s perpetual futures on the Hyperliquid exchange plunged as much as 10 percent late on Wednesday, hitting a low of roughly 156.14 dollars before recovering slightly, and they were down 6.8 percent over the previous 24 hours at 158.86 dollars as of 7:50 p.m. Eastern time. The tokenised version of the stock, known as NVDAx, dropped as much as 9 percent before edging back to 159.51 dollars. Prediction markets moved just as fast: on Kalshi, the odds of Huang stepping down as Nvidia’s chief executive before November 13 surged to 64 percent, up from about 37 percent only a few hours earlier. For a stock that has carried so much of the market’s advance during the AI boom, the question of why the stock market is down today had, by Wednesday evening, a single and startling answer.
Wall Street’s analysts moved quickly too. Bernstein slashed its rating on Nvidia shares to Market Perform from Outperform and trimmed its price target by half, to 200 dollars. The downgrade captured the new uncertainty: even if the company’s chips remain the industry standard, investors must now price the risk that the founder who built the business is removed without warning, and that the board’s investigation could produce further revelations before it is finished.
Why the Board Is Meeting: Two Affairs and a Spy Inquiry
The crisis has unfolded in three acts, each more damaging than the last. The first broke last weekend, when reports emerged that Huang had a relationship with a woman the United States authorities suspect of being a Chinese spy. The woman was identified in reporting as Alice Huang, a former executive at MegaSpeed, a data centre company based in Singapore. American intelligence officials are said to suspect her of links to Chinese intelligence, an allegation Beijing has denied. Huang admitted the affair on Sunday and apologised to his wife and children, although he did not name the other party. The same day, the board said it would investigate whether its chief executive had been the target of a foreign intelligence effort, a formulation that immediately raised questions about national security as well as personal conduct.
At first, the board sounded supportive. It said it had no reason to believe that national security or Nvidia’s secrets had been compromised, and the investigation was presented as a way to establish the facts. But the second act arrived on Wednesday, when The New York Times reported the second relationship, with Kimberly Powell, a senior executive inside the company who reports directly to Huang. The Times cited five people who worked at Nvidia. A relationship between a chief executive and a direct report raises a separate set of problems from the first affair: questions about workplace conduct, conflicts of interest, and whether company policy was followed. The report changed the character of the story from a single personal failing into a pattern, and it arrived the same day the board was reported to be weighing Huang’s removal.
The third act is the board’s own deliberation. The Journal reported that the board could meet as soon as Wednesday to decide Huang’s future, and CNN’s sources confirmed that the meeting was taking place on Wednesday evening. Sources told CBS News that the Trump administration is aware of the board’s plans, and CNN reported that some inside the administration expected the meeting to end with Huang’s ouster. The board itself is small: it has 11 directors, including Huang himself, with the others listed as independent in a regulatory filing.
Wall Street Reacts: Rivals Rise as the AI Leader Wobbles
The market’s verdict on Wednesday was not confined to Nvidia. Shares in rival chipmakers Advanced Micro Devices and Broadcom jumped in overnight trading, rising 3.5 percent and 2.5 percent respectively, as investors bet that some of Nvidia’s dominance could be up for grabs. Micron and Super Micro, two other names tied to the AI hardware trade, fell. The split reaction showed how the market is reading the crisis: not as a verdict on demand for AI chips, which remains strong, but as a company-specific shock that could redistribute value across the semiconductor sector if Nvidia stumbles.
Analysts warned that the challenges ahead are real even if the technology story is unchanged. Commentators noted that while Huang’s future as chief executive is uncertain, Nvidia’s dominance in the market will likely stay intact in the near term, because its chips and software remain the standard for training advanced AI systems. But leadership matters more at Nvidia than at most companies: Huang has run the business since he co-founded it in 1993, and he has said he does not believe in succession planning.
Brett Winton, the chief futurist at ARK Investment Management, said that if Nvidia’s board ousts Huang before conducting a thorough investigation and against the obvious immediate interest of shareholders, they are taking on huge liability. The comment captured the bind the directors are in: moving too slowly risks looking as though the board is tolerating conduct it should have acted on, while moving too fast risks a decision shareholders see as rash, taken before the investigation led by Joon H. Kim has run its course. Bloomberg reported that Nvidia is working with an outside firm to find possible replacements for Huang and is weighing the idea of naming a temporary chief while it searches for a permanent one, a sign that the board is preparing for an outcome it has not yet announced.
What Happens Next: Earnings, a Board Decision and the AI Trade
Three dates now frame the story. The first is the board’s decision itself, which had not been announced as of Wednesday evening. Whatever the directors decide, the market will read it as a verdict not only on Huang but on how seriously the board takes the two affairs and the intelligence questions around the first. A decision to keep him would need to be explained against the scale of the week’s selling; a decision to remove him would need a credible plan for who runs the company next, and how quickly.
The second date is November 17, when Nvidia is scheduled to report its quarterly earnings. The results will arrive in the middle of the crisis, and they will test whether the scandal has touched the business itself. Investors will be watching for any sign that customers have paused orders, that the investigation has distracted management, or that the company’s guidance has changed. A strong report could steady the stock; a weak one, delivered while the leadership question is unresolved, could deepen the rout.
The third question is what the episode means for the wider market. Nvidia is one of the magnificent seven stocks that have driven the market’s gains, and its fall has already weighed on the broader indexes. If the board removes the founder, the shock could ripple through the AI trade and the funds that hold Nvidia as their largest position. If it keeps him, the stock may recover some of its losses, but the investigation and the unanswered questions will linger.
For now, the facts are these: the board met on Wednesday evening to discuss the future of a chief executive who has led Nvidia for 33 years; the shares fell sharply in after-hours trading and have lost about a quarter of their value since early October; two affairs are now public, one of them involving a woman American officials suspect of being a Chinese spy; and no decision has been announced. The next statement from the board, and the earnings report that follows it, will decide whether this is the week Nvidia lost its founder, or the week it survived its worst crisis and kept him.
Source: CNN