Nvidia lost around $490 billion in market capitalization over one week after co-founder and Chief Executive Officer Jensen Huang resigned. Shares of the artificial intelligence chipmaker initially fell 14%, but by the end of the trading session the decline had narrowed to 4.3%.
The announcement of his departure came after reports of Huang’s extramarital affairs, including with a woman whom US intelligence suspects of having links to Chinese intelligence services, and with an Nvidia executive. These allegations are part of the investigation and do not represent an established finding of wrongdoing.
Who will take over Nvidia
Chief Financial Officer Colette Kress has taken over the company’s management on an interim basis. She has worked at Nvidia since 2013, while the board has begun searching for Huang’s permanent successor. His resignation took effect immediately, and he is also stepping down from the board of directors.
Huang led Nvidia for 33 years and transformed the company from a graphics card manufacturer into a major supplier of chips for artificial intelligence systems. “This leaves the company without direction. He was so central to the entire strategy that the size of the gap is now becoming clear,” said Kathleen Brooks, Director of Research at XTB.
Analysts withdraw their support
The share-price decline also affected the assessments of investment firms. Morgan Stanley and Bank of America Global Research removed Nvidia from their lists of top investment ideas, while Wells Fargo and Citigroup lowered their price targets. Analyst Tristan Gerra of Robert W. Baird cut his target from $500 to $200.
TD Cowen also removed Nvidia from its list of preferred stocks. “Huang’s departure is shocking, unprecedented and sad. We do not know what the road ahead will look like for Nvidia,” the investment bank’s analysts said.
Shares of rival Advanced Micro Devices have risen by around 30% over the week, as investors expect the company to benefit from the turmoil at Nvidia. The pressure also spread to other technology companies amid questions over whether a change in Nvidia’s strategy could affect the financing of the infrastructure built around its chips.
The impact on savings
Nvidia is among the largest holdings in global and technology funds, and at the beginning of October it accounted for around 5% of the value of global stock markets. This means the decline could indirectly affect British pension savings, individual savings accounts and funds that hold shares in the US company.
Compared with its peak at the beginning of October, Nvidia shares have fallen by around 30%, wiping out approximately $1.8 trillion in market value. Huang himself, who owns around 3.6% of the company, has lost nearly $18 billion in less than a week and around $65 billion compared with the October peak.
The company’s next key test will be its financial results for the third quarter of fiscal 2027, which Nvidia is due to present on November 17.