Nvidia heads for sixth weekly loss as dip buyers step in after Huang exit

Updated 3:45 p.m. ET, Nov. 13

Key points

• Nvidia fell 4.3% Thursday and is down 11% this week after Jensen Huang resigned as CEO.
• The stock has lost about $1.6 trillion in market value since early October, a 29% drop.
• Quarterly results on Tuesday are the next test, with analysts projecting $108.9 billion in revenue.

Nvidia shares fell 4.3% on Thursday and are down 11% for the week, putting the chipmaker on course for its sixth straight weekly decline, its longest losing run since 2012. The slide followed the resignation of co-founder Jensen Huang, who had led the company for 33 years. The board said he left after two extramarital affairs became public, one with an employee and one with an alleged Chinese spy.

Huang's Sunday email to staff admitted he had been “unfaithful” to his wife. The board separately opened an independent investigation into national security concerns raised by the reporting.

Since early October the stock has lost 29% of its value, roughly $1.6 trillion in market capitalization, and it has slipped below Apple in market value. Nvidia spent most of this year as the world's most valuable company. Huang had also been one of President Donald Trump's top allies in the corporate world, which raised the stakes of his exit.

The stock was already down about 9% the week before Huang left. Much of that decline came after the midterm elections, which delivered sweeping Democratic victories and dozens of ballot measures that could slow the AI buildout. Investors had also worried about rising interest rates, which could squeeze debt-heavy neocloud customers that rely on debt markets.

Who runs Nvidia now

The board named finance chief Colette Kress interim CEO while it runs a search for a permanent successor, and it has not yet chosen a search firm. Kress joined Nvidia in September 2013. Board chair Harvey Jones said she “has a deep understanding of our business, customers, operations and financial position.”

Financial Times reported that the board has approached Arm boss Rene Haas about the top job. Arm declined to comment on that report. Fox Business estimated that the stock decline has cut around $20 billion from the value of Huang's holdings, a paper loss rather than a realized one.

Analysts split on the transition

HSBC downgraded Nvidia to hold from buy and said the stock would struggle until a new CEO is named. D.A. Davidson's Gil Luria cut his price target to $200 from $300 but kept a buy rating, writing that the market has appropriately adjusted for the transition.

Oppenheimer expects solid earnings but said fundamentals would take a backseat near term, and warned that Huang's departure could leave a lingering share overhang. Morgan Stanley's Michelle Weaver said AI fundamentals remain strong, citing compute demand and gains from AI adoption. Robinhood's Stephanie Guild said customers are buying the dip. Shares of Broadcom and AMD rose 5% on Thursday as rivals stood to gain, though both were expected to give back part of those gains on Friday.

Results and China curbs

Nvidia reports quarterly results on Tuesday. Analysts polled by LSEG project revenue of $108.9 billion, up 91% from a year earlier. Alice Huang, a chip executive whom some US officials have reportedly suspected of spying, has been accused of smuggling Nvidia chips into China through her Singapore-based cloud company Megaspeed. Some officials have said they have not concluded she was a spy.

Senators Chris Coons and Elizabeth Warren asked the Trump administration to preserve all documents on Nvidia's exports of advanced AI chips to China. Bloomberg reported that Huang's exit removes the industry's most prominent opponent of US chip controls, which could set up a showdown over new curbs and provoke Beijing to respond.

NVDA shares are down 2.63% today as of 3:44 p.m. ET.

What's next: Nvidia reports quarterly results on Tuesday, the next test for the stock under interim CEO Colette Kress.

Sources: Axios, BBC, Bloomberg, CNBC, Financial Times, Fortune, Fox Business, MarketWatch, The Guardian, The New York Times