Nvidia Stock Sinks 8% to $159 After Jensen Huang Resigns as AMD and Broadcom Rally on Chip Rival's Turmoil

Nvidia Corp. shares fell more than 8% on Thursday after co-founder Jensen Huang resigned as chief executive, removing the leader most closely tied to the artificial intelligence boom.

Nvidia stock traded at $159.52 in morning trading, down $14.21, or 8.18%, from Wednesday's close of $173.73. The shares fell more than 11% before the opening bell. Trading volume topped 201 million shares within the first half hour, well above the three-month average of about 131 million.

The decline left Nvidia's market value at about $3.92 trillion. The stock is now down about 7% over the past 52 weeks and turned negative for the year.

Huang steps down

Nvidia's board said Thursday that Huang had resigned as president, CEO and director, effective immediately. In a regulatory filing, Nvidia said the board accepted the resignation on Wednesday, TechCrunch reported.

Chief Financial Officer Colette Kress was named interim CEO and will remain CFO. Longtime director Harvey C. Jones became Nvidia's first board chair. The board said it will consider internal and external candidates for a permanent CEO.

"I am committed to building on the extraordinary foundation Jensen created over the last 33 years," Kress said.

The resignation followed reports of Huang's relationship with Alice Huang, a former executive at Nvidia customer Megaspeed whom U.S. officials suspect of being a Chinese intelligence asset. It also followed a New York Times report of a relationship with Kimberly Powell, Nvidia's vice president of health care. China has denied the spying allegations, and Nvidia and Powell have not commented on the Times report.

Rivals gain

While Nvidia fell, some competitors rallied. Advanced Micro Devices rose about 3%, and Broadcom jumped as much as 6% in morning trading.

Investors appeared to bet that rival chipmakers could benefit from uncertainty at the industry leader, especially if customers diversify their suppliers.

Market drag

As the largest stock in many major indexes, Nvidia weighed on the broader market. The S&P 500 fell about 0.6% and the Nasdaq Composite dropped about 0.9% in early trading. The Dow Jones Industrial Average was little changed.

"The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk," Armina Rosenberg of Minotaur Capital, an Nvidia shareholder, told Reuters before the announcement.

Wedbush analyst Dan Ives had warned that losing Huang could cut Nvidia's value by 25% to 30%.

Leadership questions

Huang co-founded Nvidia in 1993 and built it into the world's dominant supplier of AI chips. He had dozens of direct reports and no publicly named successor.

Huang owns about 3.5% of Nvidia and had no super-voting shares, so the board could remove him at any time.

Earnings next week

Kress faces an early test when Nvidia reports fiscal third-quarter earnings on Tuesday, Nov. 17. Investors will watch for signs of whether the leadership upheaval has affected customers, orders or supply.

Nvidia had already lost hundreds of billions of dollars in market value since the scandal broke, after shares hit a high near $207 earlier this fall.

Analysts remain divided. Some say Nvidia's technology lead and software ecosystem will carry the company through the transition, while others warn that Huang's dealmaking and vision will be hard to replace.

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