NVIDIA shares crash 10% as board considers Jensen Huang's ouster
What's the story
Shares of NVIDIA plunged as much as 10% in after-hours trading following reports surrounding CEO Jensen Huang's personal conduct and potential leadership shakeups. According to The New York Times, Huang has been involved in an extramarital relationship with Kimberly Powell, NVIDIA's vice president of healthcare. The reveal follows Huang's prior admission of an affair with Alice Huang, a suspected Chinese spy. Meanwhile, The Wall Street Journal reported that NVIDIA's board of directors is weighing Huang's removal as chief executive.
Market reaction
Financial firms downgrade NVIDIA's stock amid scandal fallout
The news of Huang's alleged affairs has prompted several financial firms to downgrade NVIDIA's stock.
Bernstein was the latest to do so, downgrading its rating from outperform to market perform and cutting its price target from $400 to $200.
Baird also downgraded the shares to neutral, while Morgan Stanley removed them as a top pick.
If these post-market losses hold, NVIDIA's stock could fall below a $4 trillion market cap when cash trading resumes.
Broader impact
AI-linked stocks also impacted by NVIDIA's crisis
The fallout from NVIDIA's scandal isn't limited to its own stock. Other artificial intelligence-linked stocks have also taken a hit in post-market trading.
CoreWeave Inc. fell over 5%, while Intel Corp. and Dell Technologies Inc. each saw a decline of 3%.
Super Micro Computer witnessed a drop of over 4%.
Uncertain future
Huang's uncertain future raises concerns for NVIDIA
Huang's future at NVIDIA is now more uncertain than ever.
Michael O'Rourke, chief market strategist at JonesTrading, said, "It is going to be a very challenging situation."
He added that Huang had predicted 70% sales growth this year and his successor will spend the next year "putting out fires and cleaning up messes."