Nvidia falls 7.4% amid report on Jensen Huang’s future

By Sophie Lindqvist

Nvidia (NASDAQ: NVDA) traded at $160.95 in after-hours trading at 6:30 p.m. ET, down 7.4% from Wednesday’s close and 13.8% from the November 6 close, the last before Huang’s admission.

The Wall Street Journal reported at 5:27 p.m. ET, citing people familiar with the matter, that Nvidia’s board was preparing to oust CEO Jensen Huang and could meet as soon as Wednesday night to decide his future. Nvidia has not commented.

The report followed a New York Times account based on five former employees. It said Huang had a relationship with Kimberly Powell, Nvidia’s vice president of healthcare and one of roughly 60 executives who report to him.

Three days after Huang told employees he had been unfaithful to his wife, other reports linked him to Alice Huang, a former executive at Singapore’s Megaspeed whom U.S. officials suspect of spying for China. China calls that claim groundless. The reports do not accuse Jensen Huang of a crime.

What does the reported board action mean?

The report identifies no named successor. Huang co-founded Nvidia in 1993 and has run it ever since. Krzanich and Easterbrook had both joined as hired managers, a distinction that makes Huang harder to replace.

“Mr. Huang being removed immediately could be challenging for Nvidia since it does not have a succession plan in place,” Gil Luria of D.A. Davidson told Reuters after the Journal’s report.

That leaves a reported succession decision without a confirmed vote, named candidate or company statement, and the absence of those details matters more than the initial headline.

How did Intel’s 2018 exit unfold?

On June 21, 2018, Intel announced CEO Brian Krzanich’s resignation after an investigation found a past consensual relationship with an employee, violating a policy that applied to managers. Intel had no successor ready.

Chief financial officer Bob Swan ran the company as interim CEO for seven months before the board appointed him permanently in January 2019, while Intel struggled to bring its next generation of chips into production.

Intel’s shareholder record was not forgiving:

• Intel stock fell 2.4% that day, while the S&P 500 fell 0.6%.
• One year later, including dividends, Intel was down 8.7%. The S&P 500 rose 8.5%, producing a 17-percentage-point gap.
• A $100,000 investment would have been worth $91,334 after one year.

How did McDonald’s 2019 exit unfold?

On Sunday, November 3, 2019, McDonald’s said its board had fired CEO Steve Easterbrook for a consensual relationship with an employee, which violated company policy. The board named Chris Kempczinski, who ran the U.S. business, as CEO in the same announcement.

In August 2020, McDonald’s sued Easterbrook, saying he had concealed other relationships. In 2021, he agreed to return more than $105 million in pay.

McDonald’s produced a stronger result:

• The stock fell 2.7% on the next trading day.
• One year later, including dividends, it gained 14.7%. The S&P 500 gained 11.9%.
• Six months in, during the 2020 crash, McDonald’s was down 7.6%. The index was down 6.1%.
• A $100,000 investment would have grown to $114,657.

What separated the two shareholder outcomes?

The first-day declines were both below 3%, while Nvidia’s after-hours fall had already passed that threshold by a wide margin. The later divergence came mainly from two variables: a successor on day one and the health of the underlying business.

McDonald’s paired an immediate succession decision with a business the analysis described as healthy, whereas Intel lacked both a named successor and production momentum at that time.

The precedents do not establish a causal rule for Nvidia, because its founder-led structure and current operating condition differ materially from both cases.

How does Nvidia’s founder dependence change the risk?

Baird analysts Tristan Gerra and Tyler Bomba wrote earlier Wednesday that a CEO change was growing more likely and that an outside hire would be favored.

Dan Ives of Yorkville Ives has said Nvidia would be worth 25% to 30% less without Huang. That is an analyst estimate, not a disclosed valuation or transaction value.

A Blind survey of 232 Nvidia employees found 88% wanted Huang to stay. The sample measures employee sentiment, not a board vote or shareholder mandate.

The comparison characterizes Nvidia’s business as far healthier than Intel’s in 2018. It provides no revenue, margin, process-node, capacity or shipment figures to quantify that operating claim.

What can a $100,000 investor infer?

At $160.95, $100,000 buys about 621 Nvidia shares. Applying the two historical outcomes produces $91,334 on the Intel path and $114,657 on the McDonald’s path.

Neither precedent includes a founder, so the analysis says the real range could be wider in both directions. Neither figure offers a Nvidia-specific forecast.

The analysis says the board must first answer one question: whether it will name a successor quickly or leave the job open. A fast, credible choice separated the two precedents.

Until that answer arrives, the analysis treats position size as the variable a holder controls. It advises trimming a stake that would prove painful under the Intel outcome, preferably within an IRA. The comparison says selling inside an IRA does not trigger a tax bill.

The next test for shareholders is whether Nvidia can name a credible successor quickly; without that, the founder-led structure leaves performance more exposed than either precedent.