Abstract:
After reports about the extramarital affair came to light, Nvidia's board of directors held a meeting to discuss whether to fire Jensen Huang as CEO, and Nvidia's stock fell on Thursday. Jen-Hsun Huang is reportedly in a relationship with Megaspeed executive Alice Huang. Huang Renxun also had an extramarital affair with Kimberly Powell, vice president of Nvidia's medical and health business, and Powell reported directly to Huang Renxun.
Nvidia’s board of directors held a meeting to discuss whether to remove Huang Jensen as CEO.
Nvidia shares fell 6.3% in pre-market trading.
The pre-market share prices of Nvidia's rivals AMD and Broadcom rose 3.9% and 3% respectively; while other chip stocks such as Intel, Marvell, ARM, and Qualcomm all fell.
NVIDIA's stock price trend in the past 5 trading days
Many Wall Street analysts said: Huang Renxun is the core figure of Nvidia's success. If he is removed as CEO, the stock price may fall by another 20%. Nvidia's stock price has fallen by more than 20% in the past month.
Bernstein cut Nvidia's stock price target in half directly from $400 to $200 on Thursday.
Stacey Rasgon, a senior analyst at Bernstein, said on the "Asian Financial Forum" program on Thursday that Huang Jen-Hsun was accused of having a romantic relationship with his direct report, making it "harder for the board to continue to retain him."
In 1993, Jensen Huang co-founded NVIDIA and led the company's rise; propelling NVIDIA from a gaming hardware manufacturer to a core company in the AI wave.
Rasgon said that there is currently no candidate with the same "vision" who can serve as the new CEO to lead Nvidia into the future.
"Huang Renxun is almost equal to NVIDIA, he is the visionary person. NVIDIA's success today stems from a series of decisions he made ten years ago." Rasgon said, "Now, who has the ability to make key decisions for the next ten years? I can't think of a suitable person at the moment."
Members of the U.S. Congress have publicly called on Jen-Hsun Huang to resign, further putting pressure on the CEO and the company.
Richard Lehr, chief investment officer of Cuesta Capital Partners, said that Nvidia does not have a mature succession plan, which makes the stock "uninvestable."
Real said in the program "Middle East View": "There is no ready-made successor within NVIDIA. The situation is just two options: keep Huang Renxun, and the company will frequently attend congressional hearings and accept questions in the next few months; or replace him, but this will also make the stock lose investment appeal. It is not that the AI track as a whole cannot be invested, but NVIDIA itself will become difficult to invest."
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