Shares fall after a late-evening report
Nvidia shares dropped about 8% in after-hours trading on Wednesday after the Wall Street Journal reported that the chipmaker’s board is preparing to remove chief executive Jensen Huang. Reuters later reported that directors were meeting late in the day to decide his future. By Thursday morning, no decision had been announced, and Nvidia had not commented publicly on the meeting.
The reaction was quick. Nvidia’s Frankfurt-listed shares fell more than 7% in early trading. Futures tied to the Nasdaq-100 slipped by close to 1%, giving back part of the previous session’s gains.
A rebound that did not last
The timing was painful for investors. Hours earlier, Nvidia had closed at $173.73, up nearly 3%, after strong results from AI cloud provider CoreWeave calmed nerves that had been frayed by a technology sell-off the week before. Both the S&P 500 and the Nasdaq rose by more than 1%.
That relief evaporated after the closing bell. Even with Wednesday’s rise, Nvidia sat roughly 27% below its record close of $239.24, set on October 6. The after-hours drop to around $159 leaves the shares well inside bear-market territory.
How the crisis unfolded
The trouble began last weekend. On November 8, Nvidia said its board had opened an independent investigation after Mr Huang acknowledged a personal relationship with a businesswoman. Lawmakers and press reports have linked her to Chinese intelligence, though those claims remain unproven. The probe, led by outside counsel, is examining whether Mr Huang was targeted by a foreign intelligence operation and whether company secrets or national security were put at risk.
At the time, the board publicly expressed confidence in its chief executive. That position appears to have shifted sharply. The New York Times has since reported a second relationship, this one with a senior colleague, which added to the pressure. According to CBS News, the company has lost more than $450 billion in market value since the investigation was announced.
Washington turns up the heat
Political pressure has mounted in parallel. House Foreign Affairs Committee Chairman Brian Mast said he is prepared to issue a subpoena if Mr Huang does not agree to a closed-door briefing, which has been requested for November 18. Representative John Moolenaar, who chairs the House China committee, said Congress is ready to take that step. Senator Kevin Cramer, who sits on the Senate Banking Committee, has said publicly that Mr Huang should go, citing the risk of extortion.
CBS News reported that the Trump administration is aware of the board’s thinking. The scandal has also strengthened the hand of lawmakers pushing for tighter limits on advanced chip sales to China.
The succession question
If the board does act, it faces a difficult task. Wall Street analysts have said Nvidia has no obvious successor to a man who co-founded the company in 1993 and has become the public face of the AI boom. Bloomberg reported that directors have been working with an outside firm to identify candidates and are weighing an interim chief executive while a permanent search takes place.
Reuters has also reported that Nvidia employees overwhelmingly want Mr Huang to stay. That points to a possible split between staff sentiment and the board’s concerns.
What investors are watching
Nvidia is no ordinary stock. Its chips underpin much of the world’s AI infrastructure, and its weight in major indices means its moves ripple across portfolios. As one market strategist put it this week, where Nvidia goes, the broader market tends to follow.
Several dates now matter:
- The board’s decision. Whether directors remove Mr Huang, name an interim leader or delay action will set the tone for trading.
- November 17. Nvidia is due to report quarterly earnings, its first results since the scandal broke.
- November 18. The congressional briefing date requested of Mr Huang falls a day later.
The backdrop is not friendly. Hotter-than-expected US inflation data this week has pushed traders to price in a Federal Reserve rate rise in December, which tends to weigh on richly valued growth stocks.
It is worth stressing what is not yet known. The board’s outside investigation has reportedly found no sign so far that secrets were compromised, and the allegations around Mr Huang’s relationships have not been tested in any formal proceeding. For now, markets are pricing uncertainty, and few things unsettle investors more than the prospect of a founder-led giant without its founder.
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