Shares of Nvidia fell sharply in premarket trading after reports that the company's board discussed ousting chief executive Jensen Huang. The stock was down more than 7 percent before the market opened, and its losses over the previous five trading days exceeded 13 percent. The reports have raised concern among investors about who would lead the chipmaker if Huang were removed, and whether the company has a plan in place for that scenario.
The turmoil follows Huang's admission of an extramarital affair with a woman whom US officials suspect of being a Chinese spy. A second alleged affair reportedly involved a Nvidia subordinate. The Wall Street Journal reported that the board met to decide whether to oust Huang. Earlier, the board had said it retained confidence in Huang and the leadership team. At the time of reporting, Huang's future at the company had not been determined, and the board's decision remained unknown.
The episode has exposed a gap in the company's governance. Nvidia has no publicly known succession plan, leaving investors without a clear view of who would step in as chief executive. Analysts have begun weighing possible internal candidates. Among the names mentioned are Chief Financial Officer Colette Kress, Ian Buck and Chief Technology Officer Michael Kagan. Citi analysts see Kress as a likely interim option, while Morningstar has described Buck as a logical successor. It is not known whether the company has a confidential succession plan in place, and the company has not publicly disclosed one.
The stock's decline is part of a steeper slide. Nvidia shares are down more than 33 percent from their October high, when they traded above $239. The company's market value has fallen from more than $5.7 trillion to under $4.2 trillion, a loss of well over a trillion dollars in value. One analyst cautioned that the stock could become difficult to justify as an investment without a clear leader, making the question of succession a long-term concern for the share price rather than only a short-term reaction.
The situation may also bring legal and regulatory scrutiny. Nvidia already faces shareholder lawsuits, and congressional investigations are considered likely given the national security questions raised by the reported relationship involving a suspected Chinese spy. Any inquiry would add pressure on a company whose products sit at the center of the global race for advanced artificial intelligence hardware. For now, investors are watching for any statement from the board on Huang's status and on the company's leadership going forward, as the question of who runs Nvidia has moved from a background governance matter to the center of its market outlook.