Abstract:
Dan Ives, a well-known technology stock bull, believes that Huang Renxun’s value is approximately equivalent to 30% of Nvidia’s total market value. The former Wedbush Securities analyst said on Tuesday that Nvidia's market value could be wiped out by nearly a third if the head of the AI chip giant leaves.
Huang Renxun has recently been involved in a cheating scandal, causing Nvidia's stock price to plummet. Ives said that if he leaves, Nvidia's stock price could fall by 25% to 30%, to about $122 per share.
Ives, currently senior managing director of Yorkville Ives, wrote in a report: "We believe that if Jensen Huang steps down as CEO, the value of Nvidia as a company/stock will shrink significantly (25% to 30%). This will not only change the company's future development direction, but also completely reshape the competitive landscape in the artificial intelligence (AI) GPU field - both in the United States and globally, the situation will change dramatically."
Last week, affected by the overall panic in the AI sector, Nvidia's stock price suffered a heavy fall; and the related controversy surrounding Huang Renxun became the latest negative factor to further suppress its stock price. The stock has fallen 25% from its high in early October, and is down 8% year-to-date.
Ives pointed to the "key man risk" that a large portion of Nvidia's value is tied to Huang's name recognition and image. And Nvidia has no public succession plan.
"Jensen Huang is the core DNA of Nvidia, and its success and ambition in artificial intelligence are closely related to his continued tenure as CEO. Jensen Huang is irreplaceable," Ives said. "There is no one else on the management team who can seamlessly take over as CEO."
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