Nvidia Stock Falls Again as Jensen Huang Fallout Deepens Days Before Colette Kress Faces First Earnings Test

Nvidia shares fell again Friday as investors continued to digest the abrupt resignation of co-founder and chief executive Jensen Huang. The early gains that had pointed to a rebound faded.

Nvidia traded at $162.16 at 10:09 a.m. ET, down 2.42% from Thursday's close of $166.19. Earlier, the stock had climbed about 2% in premarket trading to near $170 before reversing when regular trading began.

The decline adds to a punishing stretch. Nvidia closed at $178.67 on Nov. 9 and has lost more than 20% over the past month.

Volatile session Thursday

Nvidia announced Thursday that Huang had resigned as president, chief executive and board member with immediate effect, ending his 33 years at the company. The stock fell as much as 13% that day before recovering to close down 4.34%.

Retail investors stepped in during the sell-off. Small investors bought a net $111 million of Nvidia stock in the first 30 minutes of trading Thursday, according to Yahoo Finance.

Huang's departure followed his admission on Nov. 8 that he had been unfaithful to his wife, after reports linking him to Alice Huang, a former executive at Singapore-based Megaspeed International whom U.S. officials suspect of ties to Chinese intelligence. The U.S. Justice Department said Thursday it has reached no conclusion on whether she is a spy, and China denies the allegations. Reports of relationships with two Nvidia employees followed. Huang has not publicly confirmed those reports.

Kress steps up

Chief Financial Officer Colette Kress is serving as interim CEO while the board searches for a permanent successor. She will keep her CFO role during the interim period. Harvey C. Jones has become the company's first chair of the board.

In a statement Thursday, Kress said Nvidia's "strength has always come from its people." She said she was "committed to building on the extraordinary foundation Jensen created over the last 33 years."

Several analysts cut their price targets or ratings after the leadership change, citing uncertainty over succession and Huang's central role in Nvidia's strategy and customer relationships.

Earnings next week

Attention now turns to Tuesday, Nov. 17, when Nvidia will report fiscal third-quarter results as scheduled. It will be Kress's first earnings report as interim chief executive, and she is expected to speak on the call.

Investors will look closely at demand for Nvidia's artificial intelligence chips, its revenue outlook, any comments on sales to China and any update on the search for a new CEO.

The leadership crisis comes at a sensitive time for the AI trade. Nvidia's chips power much of the world's AI infrastructure, and its shares have been a bellwether for the broader technology sector.

The broader market was also weak Friday. The Nasdaq fell about 1% after new data showed producer prices rose 6.5% from a year earlier, the biggest annual increase since November 2022.

Some analysts have argued the sell-off reflects leadership worries rather than any change in demand for Nvidia's products. They say Tuesday's results could help settle the stock if the company shows its growth remains intact. Others warn that more allegations or a weak forecast could bring renewed pressure.

This article is for informational purposes only and does not constitute investment advice.