Nvidia Falls 8% as Board Moves to Oust Jensen Huang

Nvidia stock dropped 8% in after-hours trading Wednesday after The Wall Street Journal reported the company's board is preparing to remove CEO Jensen Huang. The same day, The New York Times reported — citing five people who worked at the company — that Huang had a second extramarital affair, this time with an Nvidia executive who reported to him.

The Times report landed days after Huang admitted an extramarital affair in a memo to employees, and after Nvidia's board opened an investigation into whether its CEO had been targeted by a foreign intelligence operation. The paper previously reported that US officials believed Huang had grown close to a tech executive, Alice Huang, who had been recruited to gather information for the Chinese government. Nvidia's succession plans remain unknown, and the commentary from investors and analysts splits sharply on what a post-Huang Nvidia looks like.

What does this change for shareholders?

Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, called the likely exit a loss but not a fatal one. "Looks like Jensen is done. What a disappointment. Sad day for Nvidia shareholders and looks like another tough day for the stock. Never would have guessed he'd go down this way," Gerber wrote Wednesday on X. He added: "Jensen will be replaced and Nvidia is still Nvidia. That's business. He must go and Nvidia needs to focus on selling chips!"

Gene Munster, managing partner at Deepwater Asset Management, backed that view with a price call. He guessed the stock would open Thursday at $150 — roughly 20% below the close at the end of last week — but said he expects it to "quickly rally back." His reasoning: "AI infrastructure customers will act in their best interest. That means they'll keep buying just as many $NVDA chips with or without Jensen."

The macro worry is broader. Eric Wallerstein, chief macro strategist at Clocktower Group, argued Huang's removal could shake confidence across the entire AI trade because Nvidia's balance sheet underpins it. "Jensen has helped foster a complex web of circular financing relationships, and ultimately backstopped the AI trade, with Nvidia's balance sheet," Wallerstein wrote on X. "Removing that Put, or even placing uncertainty on its availability, will cause investors to increase the risk premium on AI-related assets."

Could Huang become a competitor?

The competitive angle is where it gets interesting for practitioners. Byrne Hobart, general partner at Anomaly Fund and founder of The Diff, pointed out that ousting Huang might hand rivals a formidable founder. "On one hand, boards have to do what they have to do. On the other hand, he's a guy who's worth $150bn, knows everyone in hardware, named his company after the Latin word for 'spite,' and he lives in a state where you can't enforce noncompetes," he wrote.

Anthony Pompliano, a crypto investor and entrepreneur, put a sharper edge on the same idea: "Jensen's yet-to-be-launched Nvidia competitor is going to do numbers in the seed round."

Trust and crisis management

Ed Zitron, CEO of EZ Primary Research, questioned what else Nvidia hasn't disclosed. "Oh so NVIDIA knew about this affair already, huh? What else is this company not telling us?" he wrote on X. He cited two prior SEC cases involving Nvidia: a 2002 matter over accounting practices and a 2022 case over disclosures tied to cryptocurrency mining and gaming revenue.

Keith Urbahn, president of the literary and creative agency Javelin, called the episode "a generational case study in how not to manage a crisis." His takeaways: "Never let a CEO's personal crisis take precedence over the interests of the company and its shareholders," and "The board must speak with its own voice. It cannot outsource its institutional credibility to the CEO."

Not everyone wants Huang gone. Jason Calacanis, co-host and executive producer of the All-In Podcast, urged the board to slow down — and posted a screenshot of his new Nvidia share purchases. "A much better solution for NVIDIA's board, shareholders, customers and employees (and America) would be to (a) finish their investigation and (b) make @JensenHuang the chairman if it comes to that," he wrote. "China doesn't need NVIDIA's chips. America needs NVIDIA to win. Act accordingly."

With the board's investigation still open and no successor named, the market's next signal will be Thursday's opening print — and whether Munster's quick-rally call holds once investors price in an Nvidia without the founder who built it.