By Marcus Ellison | M•I•A MEDIA GROUP
Nvidia shares rose during Wednesday’s regular trading session, closing at $173.73. Then came reports that the company’s board was weighing whether to remove co-founder and CEO Jensen Huang. The stock fell more than 8% in extended trading, a sharp reversal that sent U.S. stock futures lower and rattled chipmakers overseas. The drop occurred after the U.S. market closed Wednesday, and prices fluctuated through the evening.
For investors, the sell-off puts a price on a question that has rarely seemed urgent at Nvidia. How much of the company’s ability to stay ahead in artificial intelligence depends on the man who has led it for more than three decades? That question reaches beyond people who own Nvidia stock directly. The chipmaker is one of the largest holdings in funds that track the S&P 500, including a widely held Vanguard fund.
Why the stock fell
Reuters reported that Nvidia’s board met late Wednesday to consider whether to oust Huang. Days earlier, the board had announced an independent investigation after reports that Huang had been the target of a foreign intelligence effort. In its Sunday statement, the board said it had no reason to believe national security or company secrets had been compromised and said Huang would cooperate. The board also expressed confidence in Huang and his leadership team at the time. The Wednesday meeting was reported by Reuters, and Nvidia had yet to announce a decision in the reporting available early Thursday.
Huang has been central to Nvidia’s product strategy and its relationships with the companies buying its chips. A leadership change would put those responsibilities in new hands just as customers are committing billions of dollars to data centers. Investors will want to know who would take charge, whether major chip launches would stay on schedule and how a new leader would handle export restrictions and customer commitments. Reuters reported that Huang has no obvious successor.
What it means for retirement accounts and the AI industry
A household can have exposure to Nvidia through an index fund in a 401(k) or IRA. In a fund that weights companies by market value, larger companies have more influence on daily returns. An Nvidia decline can therefore pull down a broad-market fund, with the size of the effect depending on the fund’s Nvidia stake and how its other holdings perform. The overnight stock move provides an early indication of that pressure, while the next regular session will show how the broader market absorbs it.
Across the AI industry, the reaction was uneven. Reuters reported that shares of CoreWeave, a cloud computing company closely tied to the AI buildout, fell in extended trading, while chipmakers AMD and Broadcom gained. Those moves point to two questions investors are weighing at once. Companies that depend on Nvidia’s technology or financial backing could face more uncertainty, while competing chip suppliers could get a closer look from customers who want more options.
Nvidia’s most recent earnings show the scale of the business behind the stock. The company reported $96.2 billion in quarterly revenue in August, including $89 billion from its data center business. Nvidia is scheduled to report its next results Tuesday, Nov. 17. Its revenue forecast, customer spending and updates on chip deliveries will help investors gauge whether the leadership crisis is affecting the business. A board announcement could answer who will lead Nvidia. The earnings report will offer an early look at whether customers are changing their plans.
