Jensen Huang Resigns as Nvidia CEO, Stock Falls 14% at the Open

Jensen Huang resigned as Nvidia's president and chief executive and left its board on Thursday, November 12, effective immediately, the company said. Chief financial officer Colette Kress is interim CEO and keeps her finance role until a permanent successor is named. Nvidia shares plunged 14% at the open, according to the Associated Press, then recovered to close down more than 4%, according to Yahoo Finance.

The announcement came hours after the Wall Street Journal reported, late on Wednesday, that the board was preparing to remove him. This post was first published before the company's statement and has been updated with the resignation and the day's trading.

-14%

Nvidia at Thursday's open, per AP

-4%

Approximate decline at the close, per Yahoo Finance

27%

Below its record high through Wednesday, per AP

Nov 17

Quarterly results, still on schedule

What Nvidia announced

Nvidia's statement, filed with the Securities and Exchange Commission, named Harvey Jones as the first chair of the board in the company's history. Jones has been a director since 1993, TechCrunch reported. He said the board has full confidence in Kress and the leadership team. The board is starting a search for a permanent chief executive and will consider internal and external candidates.

The statement did not mention the board's investigation and carried no comment from Huang. Nvidia said it will report quarterly results on Tuesday, November 17, as previously scheduled.

What the reports said before the resignation

The story has moved quickly. On Sunday, November 8, the board opened an independent investigation after reports that Huang had been the target of a foreign intelligence effort, and Huang admitted an affair in a message to staff. We covered that announcement in Nvidia Investigation: Board Probes Jensen Huang's Alleged Spy Link. At the time, a company spokesperson said Huang was committed to continuing as CEO.

On Wednesday, the New York Times reported, citing five people who had worked at Nvidia, that Huang also had a relationship with a company executive who reports to him, according to CNBC and Euronews. Hours later the Journal reported that directors were preparing to remove him, and Reuters reported, citing a person familiar with the matter, that the board met late Wednesday to decide his future. On Thursday afternoon Reuters reported, citing two people, a relationship with a second employee, according to CNBC. Nvidia's board has 11 members including Huang, and the others are designated independent, CBS News reported, citing a regulatory filing.

The difference between the two reports matters for governance. Stacy Rasgon, a senior analyst at Bernstein, told CNBC that a relationship with a direct report made it much tougher for the board to leave Huang in position. These are media reports, and the board's own inquiry has not published findings.

Nvidia has no obvious successor

Huang is Nvidia's founder and had led it since the start. CBS News wrote before the announcement that the company lacked any obvious successor. Ben Barringer, head of technology research at Quilter Cheviot, said Nvidia had hired an external search firm to look for candidates, according to Euronews. His pick for the most obvious choice, Kress, now holds the job on an interim basis.

Wall Street's reaction was blunt. Bernstein cut its price target on Nvidia to $200 from $400 on Thursday, CNBC reported, and Cantor Fitzgerald cut its target to $250 from $350 while keeping an overweight rating. RBC Capital Markets lowered its target to $230 from $330, according to the San Francisco Standard. Before the resignation, analysts told CNBC the stock could fall 20% if Huang was removed. Those are the analysts' views, not forecasts of ours.

How AI stocks reacted

The damage spread, but not evenly, and it faded through the day. The Dow and the S&P 500 each closed about 0.3% lower and the Nasdaq Composite about 0.4% lower, according to Yahoo Finance, after the Nasdaq had been down 1.6% early in the session, the Associated Press reported. CoreWeave fell 7% to 8% in reports from Reuters and the Associated Press, giving back part of the jump that led Wednesday's rally in AI stocks. Nebius dropped about 17% after its own results, which we cover in Nebius Earnings.

Nvidia's direct rivals went the other way. AMD and Broadcom each rose more than 5% during the session, according to the Associated Press, a sign that some investors treat this as a company problem and not a verdict on AI demand. Overseas, Taiwan's Taiex fell 2.6% and South Korea's Kospi 0.6% earlier in the day, and ASML was down 1.9% in Amsterdam, Euronews reported. The 10-year Treasury yield rose above 5%, a separate weight on stocks.

The stock was already weak. Nvidia had fallen more than 20% over the past month before Wednesday's report, CNBC noted, and through Wednesday's close it stood 27% below its record high, according to the Associated Press.

What the AI Bubble Index says

The AI Bubble Index read 61.5 after Wednesday's close, in its Normal band, down from 62.2 a week earlier. That reading predates the Journal's report and the resignation. Sentiment and attention is the hottest family at 96.9, the momentum family has cooled to 48.3, and Fragility, at 69, sits above Euphoria at 61.3. You can follow each family on the dashboard.

The index measures prices, attention, credit and demand, not boardrooms. A leadership crisis at one company would reach it only through those channels: a lower share price, heavier attention, and wider stress if the selling spreads. Nvidia's weight in the major indexes is why one company's problem can become the market's, as our guide to Magnificent Seven stocks explains. Our guide to AI investment risks covers key-person risk alongside the financial kind.