Nvidia investors turned bearish before this week's Jensen Huang saga. But the selling on Wall Street accelerated in the past few days, sending the stock toward its sixth straight weekly drop, the longest losing streak since 2012.
The chip giant, which spent most of the year as the world's most valuable company, has lost 29% of its value over that stretch as of Thursday's close. That's a drop of roughly $1.6 trillion in market cap, and it fell below Apple in the process.
Huang, who co-founded Nvidia and led it for 33 years, resigned on Thursday after two separate extramarital affairs — one with an alleged Chinese spy and the other with an employee — were made public. The board named finance chief Colette Kress as interim CEO while it conducts a search for a full-time successor.
Nvidia shares fell 4.3% on Thursday, bringing their loss for the week to 11%. News of the first reported affair hit the front pages over the weekend, when Huang sent a letter to employees apologizing for being "unfaithful to my wife." The board convened late Wednesday after The New York Times reported on the other affair , this one with the company's vice president of health care.
By early Thursday morning, Huang was out, capping a stunning fall for the Nvidia co-founder, who had emerged as one of President Donald Trump's top allies in the corporate world.
"With the unfortunate departure of CEO Jensen Huang we expect a challenging transition for NVIDIA over the next few months," Gil Luria, an analyst at D.A. Davidson, wrote in a report on Thursday. Luria lowered his price target to $200 from $300, but maintained his buy rating. "We believe the market has appropriately adjusted for this transition," he wrote.
Last week, prior to Huang's departure, Nvidia shares dropped about 9%. Much of the decline came after the midterm elections, which resulted in sweeping victories for Democrats and the passage of dozens of ballot measures that could slow the artificial intelligence buildout.
In the weeks before the election, Nvidia's stock was sliding alongside the rest of the AI trade on concerns that rising interest rates would punish debt-heavy companies. While Nvidia is wildly profitable, big customers like neoclouds are reliant on the debt markets.
Heading into next week, the pressure is on Kress. Nvidia is scheduled to report quarterly results on Tuesday. Analysts are projecting 91% year-over-year revenue growth to $108.9 billion, according to LSEG. That's up 18-fold from the same quarter in 2022, just before OpenAI launched ChatGPT and kicked off the generative AI era.
Analysts at Oppenheimer wrote in a report on Thursday that, even though they see the company reporting solid earnings, "we expect fundamentals to take a backseat near term."
"The departure of Mr. Huang could, in our view, translate to a lingering share overhang," they wrote.
