Nvidia shares tumbled 14 per cent after Jensen Huang, its co-founder and face of the brand, resigned as CEO. While the stock later recovered somewhat, it pulled the US market lower, threatening to upend the artificial intelligence boom that carried Wall Street to a record high in recent years. The S&P 500 fell 0.6 per cent in its latest yo-yo move. Weakness in AI stocks dragged the Nasdaq composite down 0.9 per cent, but the rest of the market held up better. The Dow Jones Industrial Average was down a modest 15 points, or less than 0.1 per cent, as of 9:35 am Eastern time.
Nvidia stock has been falling for the last couple of days
The chip company’s stock has been sinking since its board announced an investigation into Huang for a relationship with a woman suspected of being a Chinese government agent.
It’s a stunning fall for Nvidia, which had become Wall Street’s most valuable and influential stock because of its central role in the artificial intelligence boom.
Its stock price set a record high last month after soaring an astounding 1,722 per cent in four years. That compares with the already healthy gain of nearly 109 per cent for the overall S&P 500 over the same period. But Nvidia’s price dropped 27 per cent from then through Wednesday on worries about whether Huang would remain and how Nvidia would navigate a future without him.
“Huang’s departure introduces uncertainty well beyond the company itself,” said Asa Hiken, senior analyst for research firm eMarketer, reflecting fears of wider implications and the possibility of an AI bubble.
Huang is one of the world’s wealthiest people
Huang is one of the world’s wealthiest people, with a personal fortune that Forbes estimates at more than USD 150 billion. He is the single largest individual shareholder of Nvidia stock.
Nvidia had no succession plan to prepare for the possibility of Huang’s departure, who was synonymous with Nvidia for more than 30 years, much as Steve Jobs embodied Apple.
Nvidia’s new leadership
The California-based company has announced that Colette Kress – who has been Nvidia’s chief financial officer and executive vice president since 2013 – will step into the role of interim CEO.
Before joining Nvidia more than 13 years ago, Kress worked at Cisco, Microsoft, and Texas Instruments in a variety of roles, according to her executive bio on the company’s website.