Nvidia set to lose over $600 billion as CEO faces possible ouster
Nvidia is on track to lose more than $600 billion in value since Friday as its shares continue to slide amid board discussions about potentially ousting CEO Jensen Huang.
Shares of Nvidia plunged $15.33, or nearly 9%, to $158.35 in pre-market trading, extending losses after the stock shed 9.6% on Monday and Tuesday. The dramatic decline follows revelations that Huang had an extramarital affair with a woman U.S. intelligence agencies believe was a Chinese asset.
CEO's position in jeopardy
Nvidia's board is considering whether to oust Huang, who co-founded the company in 1993 and became the face of the AI industry. His relationship with Chinese business executive Alice Huang (no relation) has raised serious national security concerns given Nvidia's importance to AI development and its chips being subject to export controls limiting sales to China.
What seemed impossible a week ago is now a reality as we cannot see Jensen running Nvidia as CEO at this point, and the stock/company should be valued without him as CEO.
Market valuation impact
Yorkville Ives analyst Dan Ives estimated Nvidia's value at $225 per share if Huang left, compared with $300 per share if he remained. He noted that Huang's public image as an AI visionary has been damaged by the scandal.
However, Swissquote analyst Ipek Ozkardeskaya suggested the impact might be overstated, noting that customers buy Nvidia's computing power, software and networking ecosystem rather than the CEO himself. Nvidia's troubles come as the AI industry faces investor concerns about potential slowdowns and profitability.
Related
