Nvidia CEO Jensen Huang Resigns Amid Scandal; CFO Colette Kress Named Interim CEO as Analysts Downgrade

NVDA's board announced on Thursday, November 12, that Jensen Huang has resigned as president, chief executive officer and a member of the board, effective immediately, ending a tenure that began when he co-founded the company in 1993. Chief financial officer Colette Kress becomes interim CEO and will keep her CFO role until a permanent successor is named; the board said it will consider internal and external candidates. Nvidia also named its first-ever board chair, Harvey Jones, the former CEO and executive chairman of Synopsys, who said the board expects operations, customer commitments and the product roadmap "to continue without interruption". Huang has since agreed to testify before Congress, according to CNBC.

The exit followed a fast-moving week. On November 8, Huang acknowledged in an email to employees that he had an affair with a woman U.S. officials believe is a Chinese intelligence asset, and the board opened an investigation while saying it had no reason to believe national security or Nvidia secrets were compromised. On Wednesday evening, The New York Times reported a second relationship, with Kimberly Powell, Nvidia's vice president of healthcare, and The Wall Street Journal reported that the board was preparing to remove him. Reports also noted that the company had no board chair, no chief operating officer and no named succession plan, with about 60 executives reporting directly to Huang.

The stock fell about 8% in after-hours trading on Wednesday and sank as much as 10% on Thursday morning after the resignation; SentiSense's 15-minute-delayed data showed it at $166.38 in late-morning trading, down 4.2% on the day. The Kobeissi Letter estimated that the scandal has erased about $750 billion of market value since it began. Rivals moved the other way: AMD rose more than 3% and AVGO edged higher on bets that business could shift their way, while Nvidia-linked names fell, with CRWV down 14% and NBIS down 20% in premarket trading and TSM and INTC each down about 4%.

Brokers moved quickly. Bernstein cut Nvidia to Market Perform and halved its price target to $200 (CNBC); Melius Research cut it to Hold with a $185 target, and William Blair moved to Market Perform, while Cantor Fitzgerald kept its Overweight rating but lowered its target from $350 to $250 (MarketBeat). SentiSense's analyst tracker also logged downgrades from Oppenheimer, KeyBanc and Evercore ISI on Thursday and from Baird on Wednesday, against no upgrades.

The next test is the fiscal third-quarter report on Tuesday, November 17, after the close. Nvidia guided in August to revenue of $108 billion, plus or minus 2%, and the consensus estimate in SentiSense's earnings calendar is $108.84 billion in revenue and $2.47 in earnings per share. Seaport's Jay Goldberg has noted that demand is contracted into next year, so investors will be listening for whether Kress and the new chair can show that order flow and the product roadmap are unaffected while the CEO search runs.