Key Points
- Jensen Huang resigns after 33 years of leading NVIDIA
- As management uncertainty increases, NVIDIA's stock price has fallen by about 10%.
- Collette Kress took over as interim CEO before the November financial report.
NVIDIA's stock (Nasdaq code: NVDA) fell by about 10% in pre-market trading on November 12. Previously, the founder and CEO Jensen Huang resigned following an escalating corporate governance dispute, ending his 33-year leadership of this artificial intelligence chip manufacturer.
NVIDIA appoints Colette Kress, who has long served as Chief Financial Officer, as the interim CEO. The board of directors is currently searching for a permanent successor. Jensen Huang has also resigned from the company's board of directors, marking a significant change in leadership at one of the world's most valuable technology companies.
This resignation occurred after an investigation by NVIDIA's board of directors on November 8th. The investigation was in response to reports that Jensen Huang had been targeted by foreign intelligence operations. At the time, the directors emphasized that there was no reason to believe that NVIDIA's confidential information or U.S. national security had been compromised.
Why is NVIDIA's stock price falling?
NVDA's stock price fell by about 10% before the opening on Thursday, continuing the sharp correction that had already wiped out billions of dollars in the company's market value.
NVIDIA closed at $173.73 on November 11, up 2.92% during regular trading hours, but tumbled significantly in the after-hours/extended trading session due to reports that Jensen Huang might be replaced.
Subsequent resignations confirmed investors' concerns regarding management stability, which stemmed from an escalating investigation surrounding Jensen Huang.
Jensen Huang acknowledged having an extramarital affair in a message sent to employees on November 8th. There are also separate reports questioning his relationship with a business executive who is suspected by U.S. authorities of being involved in Chinese intelligence activities.
These allegations are different from any confirmed security violations. NVIDIA has not yet confirmed that Jensen Huang disclosed restricted technology or confidential information.
This sell-off also occurred after a brief rebound in NVIDIA's stock price on Wednesday, when investors expected the situation to may stabilize.
Who is Colette Kress?
Clette Kress has served as NVIDIA's Chief Financial Officer since 2013 and was responsible for financial affairs during the company's transformation into a leading AI computing hardware provider.
Her appointment provides continuity in financial management, however NVIDIA has not yet announced who will become the permanent CEO.
Before Jensen Huang resigned, speculation about his successor had already intensified, and Ian Buck, a senior engineering executive at NVIDIA, was regarded as one of the leading candidates in the succession predictions.
This leadership transition has brought more uncertainty to NVIDIA's product strategy, customer relationships, and its ability to maintain a competitive advantage in the field of AI accelerators.
Jensen Huang played a central role in the development of the NVIDIA CUDA software ecosystem and during the company's expansion into the AI data center.
NVDA What will happen next?
NVIDIA's next major catalyst is the financial report for the third quarter of fiscal year 2027, which is scheduled to be released on November 17th.
Investors will be watching data center revenue, demand for AI accelerators, profit margins, as well as management's outlook for 2027, as the company is undergoing its first leadership transition since its establishment.
This resignation also comes at a time when Wall Street's concerns about NVDA are growing, including analysts lowering their target prices and doubts regarding the valuation of AI's infrastructure.
At the same time, the strong demand across the entire industry remains evident. CoreWeave, which is supported by NVIDIA, recently announced a 168% increase in quarterly revenue, indicating that investment in computing power continues.
