Nvidia Shares Crash 10% in Pre-Market Trading as Investors Ponder Potential Ouster of Jensen Huang

Nvidia shares dropped more than ten percent in pre-market trading Thursday after reports that the company’s board is considering the removal of CEO Jensen Huang following revelations of two extramarital relationships, one of them with a direct report and another with a woman U.S. intelligence officials reportedly believe is a spy for China. Jensen Huang has now resigned from his position as CEO. CNBC reports that Nvidia stock is down more than ten percent in pre-market trading as of 8:58 a.m. EST. The stock is now down more than 20 percent over the past month, in large part due to Huang’s China spy scandal. Since this story was first published, Nvidia announced that Jensen Huang has resigned from his position as CEO. The slide follows a rough week for the chipmaker. On Sunday, Huang admitted to having an affair. The media reported he was romantically involved with Alice Huang, an executive at the cloud company Megaspeed, who U.S. intelligence officials reportedly believe is a spy for China. Then, on Wednesday, the New York Times reported that Huang had a separate extramarital relationship with Kimberly Powell, Nvidia’s vice president of health care, who reports directly to him. CNBC confirmed that the Nvidia board met Wednesday to discuss whether to remove Huang as CEO. U.S. lawmakers have also called for his resignation. Huang co-founded Nvidia in 1993 and has led the company since. Stacy Rasgon, a senior analyst at Bernstein, told CNBC’s “Squawk Box Asia” on Thursday that the relationship with a direct report changes the calculus for the board, saying it is “much tougher for the board to leave him in position.” Bernstein cut its Nvidia price target from $400 to $200 that same day. Rasgon also questioned who could step in to replace Huang as the company’s strategic leader. “Jensen is Nvidia, right? He is the visionary. The reason they’re in the position that they’re in today is because he made decisions 10 years ago. Who is the right person now to make the decisions for the next 10 years? I don’t intuitively know who that person would be,” he said. Richard Reyle, chief investment officer at Questar Capital Partners, told CNBC’s “Access Middle East” that Nvidia faces a difficult choice because it lacks a clear successor. “Nvidia doesn’t have that person in place, and so it’s going to be either a choice of keeping Jensen and being faced with months and months of being hauled in front of probably congressional boards and things to explain themselves and all kinds of interrogations,” Reyle said. He added that ousting Huang would carry its own cost. “Or they’re going to have to move on from him, and that’s just going to make the stock uninvestable. That doesn’t make the AI trade uninvestable, but it certainly makes Nvidia uninvestable,” Reyle said. Several Wall Street analysts told CNBC that removing Huang as CEO could send Nvidia shares down 20 percent. Read more at CNBC here. Update — Added the resignation of Jensen Huang from his position of CEO, which occurred after this article was originally published. Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.