Nvidia’s share price slipped about six percent on Thursday after the company’s board convened to consider dismissing CEO Jensen Huang. The meeting followed public reports that Huang has been involved in two extramarital relationships, prompting investors to question his continued leadership. The uncertainty surrounding the CEO’s personal conduct has added to broader concerns about governance at a firm that dominates the artificial-intelligence chip market.
According to a report in The Financial Times, Huang acknowledged on Sunday an affair with Alice Huang, an executive at cloud-services firm Megaspeed, whom U.S. intelligence officials suspect of acting as a Chinese intelligence asset. A separate New York Times story identified a second relationship with Kimberly Powell, Nvidia’s vice president of health-care, who reports directly to the CEO.
In pre-market trading, rivals AMD and Broadcom posted gains of roughly 3.9 % and 3 % respectively, while other semiconductor names,including Intel, Marvell, Arm and Qualcomm,traded lower. Nvidia’s stock has already shed more than 20 % over the past month, and several Wall Street analysts warned that a leadership change could trigger an additional 20 % decline.
Bernstein responded by cutting its price target for Nvidia from $400 to $200, effectively halving its valuation outlook. Senior analyst Stacy Rasgon told CNBC that Huang’s alleged affair with a direct subordinate makes it considerably harder for the board to retain him, and she expressed doubt about any clear successor capable of steering the company through the next decade of AI growth.
U.S. lawmakers have publicly urged Huang to resign, intensifying pressure on Nvidia’s leadership. Richard Reyle, chief investment officer at Questar Capital Partners, warned that the company’s lack of a succession plan renders its shares effectively uninvestable, citing the prospect of prolonged congressional scrutiny and the uncertainty surrounding any replacement for the founder-CEO.