Tesla chief executive Elon Musk stated it would be an honor to hire Nvidia (NASDAQ: NVDA) CEO Jensen Huang after reports emerged that Nvidia’s board is preparing to discuss removing Huang following an extramarital relationship with an executive.
Nvidia Shares Decline Following Calls for Huang to Resign
- Nvidia shares declined 8.61% in after-hours trading to $158.78 following reports of the board meeting and the relationship.
- Sen. Kevin Cramer, R-N.D., joined other lawmakers in calling for Huang to resign.
- Wall Street analyst Dan Ives estimated that Nvidia could be worth 25% to 30% less as a company if Huang is removed as CEO.
Board Meeting Prepares for Leadership Shift
The Wall Street Journal reported that Nvidia (NASDAQ: NVDA) board members are preparing to meet to discuss the future of Jensen Huang. CNBC reported that the developments sent shares down more than 8% in after-hours trading following a regular session close of $173.73.
That would be an honor
Late Wednesday stateside, financial blog Zerohedge wrote on X, “Elon please hire Jensen,” to which Musk replied, “That would be an honor.” CNBC said that the exchange occurred as public pressure mounted against the longtime technology executive.
The reporting followed a New York Times story detailing that Huang had an extramarital relationship with Alice Huang, a business executive whom U.S. intelligence identified as having been recruited by China’s Ministry of State Security. The Motley Fool reported that Huang and Nvidia acknowledged the executive acknowledged being unfaithful to his wife in an email to employees.
Exactly
Lawmakers and Wall Street Analysts Weigh In
Federal lawmakers have stepped up pressure regarding the leadership of the artificial intelligence chip giant. Sen. Kevin Cramer, R-N.D., a member of the Senate Banking Committee, reiterated his call for Huang to resign, telling CNBC, “As a matter of his own conscience, he should resign.”
Cramer joined Rep. Suhas Subramanyam, D-Va., and Rep. Don Bacon, R-Neb., in calling for the executive’s departure.
“What is it worth when a key man is just erased? Let me think about how sickening this is and then i will come back to you. I want to throw up,” Jim Cramer wrote on X, according to Yahoo Finance.
Analysts Price in Leadership Transition Risks and Valuation Drops
Market analysts are actively pricing in the risk of a leadership transition at the semiconductor firm. According to The Motley Fool, Wall Street analyst Dan Ives estimated a roughly 15% chance of removal and wrote that if Huang leaves, the company is worth 25% to 30% less.
Jensen we hardly knew yah. Just plain awful….
| Metric / Category | Previous Close / Figure | After-Hours / Impact |
|---|---|---|
| Nvidia Share Price (NASDAQ: NVDA) | $173.73 (Regular Close) | $158.78 (Down 8.61%) |
| Estimated Valuation Drop (Dan Ives) | Current Market Valuation | Minus 25% to 30% |
| Estimated Removal Probability | Board Investigation Ongoing | Roughly 15% |
Futurum Group CEO Daniel Newman said that Nvidia will survive any transition but would require its own distinct leadership successor. “If Jensen is out it will be a very different company going forward,” Newman said.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
$NVDA will survive no matter what happens. But if Jensen is out it will be a very different company going forward. It will need its own Tim Cook. pic.twitter.com/aJ9Rq2KjGT
— Post by @danielnewmanUV on X Group CEO Daniel Newman
More on Jensen Huang
Ask I said this morning, there is a bench. As Mike from Coreweave said, there is a company. What is it worth when a key man is just erased? Let me think about how sickening this is and then i will come back to you. I want to throw up.
Hard not to be sad with the news. Jensen will be replaced and Nvidia is still Nvidia. That's business. He must go and Nvidia needs to focus on selling chips! $NVDA
This one will be hard, if not impossible, to recover from.
Remember: AI infrastructure customers will act in their best interest. That means they’ll keep buying just as many $NVDA chips with or without Jensen. My guess: the stock opens at $150 (it’s $160 in after-hours). That would be down ~20% from Friday’s close. I expect it to…
It’s still $NVDA’s game. https://t.co/AgHCE6wZOT
88% of surveyed $NVDA employees reportedly want Jensen Huang to remain CEO while just 1% want him removed. Would've been pretty wild if Nvidia employees turned on the guy who made half of them millionaires. pic.twitter.com/3uxDZLZfCI
NYT says Jensen Huang had a relationship Nvidia's vice president of health care. https://t.co/restNfM7wJ
Useful summary of situation – scandal affecting political climate in Washington and adding momentum to legislation to tighten export controls but unlikely to infringe upon Trump’s near-term leader-level diplomacy with Xi. https://t.co/XBrKH2QuXy
The New York Times reports Jensen Huang allegedly had another affair, this time with $NVDA VP of Healthcare Kimberly Powell citing five people who worked at the company. The two were reportedly seen being affectionate at a hotel during Nvidia's March conference. pic.twitter.com/JrvMc302Xd
