Huang’s resignation sends Nvidia shares down 9.7% as investors weigh company’s future
Key Facts
Jensen Huang resigned immediately as Nvidia’s CEO and chairman and from its board, the Associated Press reported, citing the company, on Thursday, November 12. The stock fell 9.7% in morning trading, the agency reported, following the resignation announcement. Shares had fallen 14% at the open, in one of the sharpest immediate reactions to a leadership change. The board appointed CFO Colette Kress interim CEO and announced the appointment of Harvey C. Jones as its first chairman. The moves put the company’s leadership through an immediate transition, while the impact of Huang’s absence on the company and the market remains under scrutiny.
The resignation followed a sharp decline in the stock in recent weeks: shares had fallen 27% from their October record through Wednesday, November 11, according to the Associated Press. Before Thursday’s open, they fell more than 7% to $160.85, leaving them 34% below their record set just over a month earlier. The stock closed at $173.73 on November 11, according to EL7 data. The agency said concerns included Huang’s continued tenure and the company’s future in his absence. In Thursday morning trading, the S&P 500 fell 0.6% and the Nasdaq Composite 0.9%, alongside Nvidia’s 9.7% decline.
The board announced on November 8 that it had launched an independent investigation into reports that Huang was the target of a foreign intelligence effort, saying the inquiry would cover all available information. The allegation raised security concerns, in the Associated Press’s description, while China’s Foreign Ministry said the espionage allegations were "unsubstantiated" and "nothing but slanders against China." The board statement did not give a reason for the resignation, so the company’s announcement does not formally link the investigation to Huang’s decision to step down. These developments remain the immediate backdrop to the leadership change, with no outcome of the investigation disclosed in the available information. Reuters said the company is looking for a permanent successor from inside or outside the company, and that Huang’s stake in it is about 3.61%.
The leadership shock came as Nvidia had reported strong business growth in the second quarter of its fiscal 2027. Revenue reached $96.2 billion, up 106% year over year, while data center revenue was $89.0 billion, up 117%. The company forecast revenue of $108.0 billion for the third quarter, with a ±2% margin. It said the forecast assumed no data center compute revenue from China. This operating performance and outlook put the stock’s decline in the context of leadership concerns, while the next quarterly results have yet to be released.
Moves extended to shares of companies linked to the chip sector and AI infrastructure during Thursday’s session. Advanced Micro Devices shares rose 2% and Broadcom gained 5.2%, while CoreWeave fell 10.9% at the open, according to the Associated Press. The previous night, Nvidia shares fell more than 8% in extended trading after reports of a board meeting about Huang’s future, Reuters reported via MarketScreener. Nasdaq 100 futures fell about 1% in Asia, as investor concerns and the stock’s post-market decline weighed on them. The Associated Press said the implications of the resignation for Nvidia’s future after Huang remain unresolved, with the question extending to the entire market.
Attention now turns to results for the third quarter of fiscal 2027, which Nvidia said it will release on November 17. The company will hold its earnings call at 2 p.m. Pacific time that day. The date comes days after the resignation, as the company faces questions about permanent leadership and its path after Huang. The results will also provide the first quarterly update after its revenue forecast of $108.0 billion, with a ±2% margin, which excludes data center compute revenue from China. Markets are still waiting to see the implications of the leadership change for the company and its stock performance.