Huang’s resignation sends Nvidia shares down 4.3% ahead of third-quarter results on November 17
Key Facts
Nvidia shares fell 4.3% in the November 12 session after recovering from an opening decline of about 14%, according to the Associated Press. The move followed Jensen Huang’s resignation from his positions at the company, a leadership transition ahead of the quarterly results due on November 17. A company filing with the Securities and Exchange Commission showed that the board accepted his resignation on November 11, effective immediately. The decline and timing of the announcement put the company’s results and forward guidance in focus for investors. Those results will be the first scheduled financial disclosure after the leadership transition was announced, for a quarter that ended on October 25.
The board appointed CFO Colette Kress as interim CEO, while she continues as executive vice president and CFO until a permanent successor is named, according to an Nvidia statement. The company said the board had begun searching for candidates both inside and outside the company. The board also appointed Harvey C. Jones as its first chairman. The statement quoted the board as expecting operations, customer commitments and the product roadmap to continue without interruption. The arrangement puts Kress at the forefront of the upcoming disclosure, while the search for a permanent CEO continues.
In trading, Nvidia shares fell from a November 6 close of $186.64 to $178.67 on November 9 and $168.89 on November 10, before rising to $173.73 on November 11. They then closed at $166.19 on November 12, according to EL7 data. In that session, the stock recouped part of its losses after the opening decline but ended the day lower. The move comes days before the company’s scheduled announcement, making the quarterly results and its next outlook the next near-term focus for investors. The upcoming comparison centers on official revenue guidance and analyst estimates, particularly for the data center business.
In its latest reported results, Nvidia posted revenue of $96.2 billion in the second quarter of fiscal 2027, ended July 26, up 18% from the previous quarter and 106% from the same period last year. Data center revenue was $89 billion, up 18% quarter over quarter and 117% year over year, according to the company’s statement. For the third quarter, Nvidia forecast revenue of $108 billion, plus or minus 2%. It estimated gross margin at 74%, plus or minus 50 basis points, and operating expenses at $9.2 billion on a GAAP basis and $9 billion on a non-GAAP basis. These figures provide a baseline for comparing actual results with expectations, while data centers remained the biggest growth driver in the previous quarter.
Visible Alpha, according to S&P Global, expects total third-quarter revenue of $109.3 billion, including $101.8 billion from data centers. Estimates for revenue in that segment range from $99.7 billion to $110.8 billion, leaving a wide range of potential performance for the business that accounts for the largest share of revenue. S&P Global’s analysis attributed increases in quarterly revenue estimates and fiscal-year estimates since the previous quarter to expected strength in the Blackwell architecture, noting that strong demand from cloud service providers for graphics processing units and platforms supports revenue growth. Meanwhile, Visible Alpha’s consensus for data center gross margin is 73.7% for fiscal 2027, compared with levels of 78% in fiscal 2024 and 2025. This expected margin decline adds another measure alongside revenue growth when assessing the results.
On the second-quarter earnings call, Kress said the company expects revenue to grow about 70% in fiscal 2028. The company added that third-quarter growth is expected to be driven primarily by the ACIE platform and data centers, and that faster growth among hyperscale computing customers is expected in the fourth quarter and into fiscal 2028 as supplies of Vera Rubin increase. But Nvidia said supply will remain a constraint through at least the end of fiscal 2028. This means demand and revenue growth expectations come alongside a supply constraint acknowledged by the company. The Associated Press reported that Huang said in March that chip backlogs could reach $1 trillion by year-end, double his estimate a year earlier.
Nvidia scheduled its third-quarter fiscal 2027 results announcement for November 17, at about 1:20 p.m. Pacific time, with the earnings call set to begin at 2 p.m. The company said Kress will issue written commentary immediately after the results are announced, followed by a question-and-answer session limited to financial analysts and institutional investors. The results will show performance for the quarter ended October 25 against the company’s forecast of $108 billion and Visible Alpha’s consensus of $109.3 billion. They will also show data center revenue against the consensus estimate of $101.8 billion. The announcement comes as Kress takes over as interim CEO and the board continues its search for Huang’s permanent successor.