Nvidia’s board met into Wednesday evening to decide whether CEO Jensen Huang, who led the chipmaker for more than 30 years, should remain in his job following the Chinese spy scandal and allegations of a second affair with a company Executive. Stock analysts who follow the company’s every move commented on the situation just hours before Huang’s ouster.
Breitbart News reported Thursday morning that Nvidia has removed Jensen Huang as CEO, with CFO Colette Kress taking over as interim CEO. CNBC reports that Top stock analysts provided comments and thoughts to investors shortly before the official announcement, sharing their vision of what happens with the AI chip giant after the Jensen Huang era comes to an end.
Citi analysts Atif Malik and Papa Sylla cut their price target on Nvidia to $225 from $285 overnight. They floated the idea that CFO Colette Kress could step in as interim CEO while the board looks outside the company — which ended up being correct. “If Jensen were forced out, it would mark the end of an era,” they wrote, adding: “Under his leadership, Nvidia became the dominant force in AI infrastructure, the primary beneficiary of the global AI spending cycle, and one of the world’s most valuable companies. A leadership transition creates an overhang on the stock given his central role in strategy, product vision, customer relationships, and investor confidence.”
Dan Ives of Yorkville Ives & Co. was blunter. “In our view the writing is on the wall that Jensen’s days at Nvidia could be numbered and we would expect this to be a very fluid situation over the next 48 hours,” he wrote overnight. He thinks the damage is done either way: “Jensen has created a black eye moment for himself and Nvidia and now has created a spider web of complexity that Wall Street, Silicon Valley, DC, and the global tech ecosystem are trying to figure out what is next.”
Ives even put a number on Huang’s worth to the company: “We believe Nvidia’s value is $300 per share with Jensen as CEO and $225 per share without Jensen as CEO.” He still expects Nvidia to come out the other side. “The stock will clearly be under pressure with this fluid news but the reality is its a dark day for Nvidia, but the company will navigate this turmoil and get through to the other side and remain a core foundational piece of the AI Revolution,” he wrote.
Not everyone thinks losing Huang would wreck the company. Nathan Thooft, chief investment officer at Manulife Investment Management, told CNBC’s Squawk Box Asia Thursday that Nvidia has depth to draw on. “As much as there is a lesson here for Nvidia around corporate governance, around key man risk… the reality is there is still 40,000 other employees at Nvidia, and there is some real talent there, and I have no doubt that there are some executors within Nvidia that the board will be able to tap to execute on their existing plans and continue to manage the company,” he said. But he warned that Huang’s instincts have been central to where the company is headed. “I think the bigger risk is the foresight in the next several years, where Nvidia was driven by a lot of the mindset and thoughts that come out of their CEO, and if he’s no longer there they’re going to have to find that replacement,” he said.
Robert Greifeld, the former Nasdaq chairman and CEO, told CNBC’s Morning Call Thursday that this points to a governance problem. “You can’t deny the board has done a horrible job of succession planning,” he said. He also raised a question the board will have to settle soon: “What the board has to find out in the next days or weeks is, did Jensen lie to them.”
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.
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