Jensen Huang ousted: Investors weigh NVIDIA sell-off as Trump backs Tim Cook to lead

NVIDIA (NASDAQ: NVDA) shares plunged about 10% at the U.S. open after the board ousted co-founder and CEO Jensen Huang. Stock forums lit up as retail investors talked up the chance to buy NVIDIA at around 11 times forward earnings. By the afternoon, the shares had clawed back some of their losses, though it's still trading at a 52-week low.

The broader U.S. market also appeared to shake off the drama. The Dow, S&P 500 and Nasdaq Composite all rebounded from session lows, swinging between gains and losses throughout the day.

NVIDIA named executive vice president and chief financial officer Colette Kress interim CEO while the board searches for a permanent successor. Directors also appointed Harvey Jones as the company’s first board chair.

“The Board has full confidence in Colette and the leadership team, and we expect the company’s operations, customer commitments and product roadmap to continue without interruption,” Jones said.

It was a swift fall for the executive who became the face of the AI boom. Huang, who co-founded NVIDIA in 1993 with Curtis Priem and Chris Malachowsky, acknowledged over the weekend that he had been unfaithful to his wife.

The admission followed reporting about his relationship with Alice Huang, an unrelated former executive at NVIDIA customer Megaspeed whom U.S. officials reportedly suspected of working for Chinese intelligence.

The pressure intensified after The New York Times reported a second affair involving NVIDIA executive Kimberly Powell, who leads the company’s healthcare business.

This is not a demand shock

Thomas Rice, co-founder and portfolio manager at Minotaur Capital, told Livewire yesterday that his Minotaur Global Opportunities Fund holds NVIDIA but is underweight. He expected the shares to take another hit if the board went through with forcing Huang out - but he believes that most of the bad news had already been priced in.

"For the broader AI trade, this is a governance shock at one company, not a demand shock," he told Livewire.

“The bigger swing factors are who replaces him and what the outlook looks like at results on 17 November (18 November in Sydney)."

Rice had said Kress is indeed the natural interim choice. For a permanent appointment, he points to Ian Buck, who helped create NVIDIA’s CUDA software platform and runs its data centre business. Buck has yet to be tested as a CEO, and Rice expects the board to consider external candidates as well.

“The first thing I'd want to see is the product roadmap reaffirmed, including the Vera Rubin ramp. After that, I'd want the senior engineering team kept together. I'd also want clarity around compliance questions regarding Megaspeed.”

The earnings risk runs through Washington

Rice sees the biggest increase in risk in Washington, where NVIDIA has opposed proposals for chip tracking and tighter export oversight. He says the company’s outlook already assumes no data centre revenue from China, with Hopper shipments to the country accounting for less than 1% of data centre revenue last quarter.

“The bigger risks are slower licences for the Middle East and other sovereign deals, and compliance costs from chip tracking. On top of that, NVIDIA would have less pull in Washington at exactly the wrong time," he said.

Mohamed El-Erian, Chief Economic Adviser for Allianz and a former PIMCO chief executive, said on LinkedIn investors had largely shrugged off the initial reports on the assumption Huang would stay. He said the latest developments challenge that assumption and could have repercussions beyond NVIDIA.

"This is no ordinary CEO. This is no ordinary company. This is no ordinary sector. This is no ordinary time," El-Erian wrote.

“With so much levered to all this, and with so much uncertainty in play, it's hard to see the effects contained to just the company."

Rice is also watching specialist cloud providers CoreWeave (NASDAQ: CRWV) and Nebius (NASDAQ: NBIS), both of which fell during the session. Under Huang, NVIDIA supported specialist cloud providers through investments, capacity commitments and guarantees. Rice says a successor could be more cautious about committing NVIDIA’s balance sheet to those deals.

"Jensen has backed CoreWeave, Nebius and their peers with investments, capacity commitments and guarantees. A new CEO, with a board under scrutiny, could be more conservative with NVIDIA's balance sheet, though NVIDIA does have a strategic incentive to support a broader customer base," Rice said.

Australian investors also have exposure to NVIDIA either directly or via ETFs such as VTEK, NDQ, IVV and FANG. It'll

The next ASX session will be a better test of how much of the sell-off flows through to each fund, depending on its NVIDIA weighting and how the rest of its holdings trade.

Could Google and Amazon gain ground?

Google’s TPUs and Amazon’s Trainium already give some of NVIDIA’s biggest customers alternatives. Rice says uncertainty at the top could strengthen those buyers’ hand as they negotiate chip capacity for 2027 and 2028. With advanced packaging capacity tight across the industry, he expects any near-term pressure to show up first in NVIDIA’s margins.

“The longer-term risk would be if a CEO change reduces NVIDIA's ability to execute at the frontier, as happened to Intel.”

Retail buys the dip as fund managers weigh their next move

Retail buying helped put a floor under NVIDIA shares. Individual investors bought a net US$111 million worth of the stock in the first 30 minutes of trading, the biggest opening burst of retail buying on record for NVIDIA, according to Vanda Research data cited by Reuters.

Minotaur Capital's Rice was already looking to add to the fund’s NVIDIA position before the sell-off. The lower price makes the stock more tempting, but he wants clarity on who will lead the company.

“I think this is an opportunity rather than a time to bail. The business is in good shape, and the stock was looking cheap before this fall,” Rice told Livewire.

“We're currently underweight and have been looking for the right point to add. A forced leadership change at a sensible price could be it. We'd just like a little more clarity on who's running the company before we lean in hard.”

Hightower Advisors chief investment strategist Stephanie Link has already made her move. She told CNBC’s Halftime Report she sold NVIDIA after Huang’s departure and bought Micron Technology (NASDAQ: MU), keeping exposure to the AI trade through another chipmaker.

Link still expects a strong quarterly result from NVIDIA next week. She told CNBC the stock was unlikely to trade on fundamentals for a while as investors focus on the investigations, the leadership change and the risk of further departures.

Can NVIDIA execute without Huang? Trump calls on Tim Cook to lead

ClearBridge Investments portfolio manager Michael Feldman says NVIDIA’s technology roadmap is largely visible for the next several years. His concern is whether the company can deliver on it without Huang, who coordinated the business through supply bottlenecks and had close access to U.S. President Donald Trump.

“Jensen has been the chief conductor of an extraordinarily complex system,” Feldman told Reuters. “In a world with real bottlenecks, that coordination is a competitive advantage in itself.”

Trump, meanwhile, named former Apple CEO Tim Cook as his preferred successor to Huang.

“NOW THAT Nvidia CEO JENSEN HUANG, who has done a fantastic job, has resigned, there is only one man to take his place - TIM COOK of Apple,” Trump wrote on social media.

“A Legend replaces a Legend!”