Nvidia Board Prepares to Remove CEO Jensen Huang as Shares Fall 8% After Hours

Nvidia’s board is preparing to remove chief executive Jensen Huang, The Wall Street Journal reported Wednesday, and shares in the chipmaker fell more than 8% in after-hours trading after the report.

The Journal, citing people familiar with the matter, said directors could meet as soon as Wednesday night to decide Huang’s future. Reuters, citing a person familiar with the matter, reported the board was meeting late Wednesday. Bloomberg reported the board has been working with an outside firm to identify possible replacements and is weighing whether to name an interim chief executive during the search. No decision had been announced as of Wednesday night, and Nvidia did not comment when Reuters asked.

The reports followed a New York Times report earlier Wednesday that Huang had a relationship with Kimberly Powell, Nvidia’s vice president of health care, who reports to him. The Times cited five people who worked at the company. Days earlier, the board opened an independent investigation after reports tied Huang to Alice Huang, an executive U.S. intelligence officials believe works for China’s Ministry of State Security. The board hired the law firm Wachtell, Lipton, Rosen & Katz to run the inquiry, and on Sunday Huang told staff in a memo that he had been unfaithful to his wife.

Nvidia closed the regular session at $173.73, up 2.87% on the day, then slid to $158.76 by 7:59 p.m. Eastern, a drop of 8.6%. The stock has fallen about 23% in seven trading sessions since its Nov. 3 close of $206.69. Reuters reported the company has lost about $600 billion in market value since the board opened its investigation. Nvidia is valued at roughly $4 trillion.

A company with no clear successor

Analysts quoted in the coverage said the absence of a succession plan is at the center of the sell-off. Huang co-founded Nvidia in 1993 and has run it for 33 years, with about 60 direct reports, according to TechCrunch. Chief financial officer Colette Kress, in the job for more than a decade, is the name most often mentioned as a possible interim chief executive, while Ian Buck, who runs the data center business, leads prediction-market odds for the permanent job. Under Nvidia’s bylaws, a majority of its 11 directors can remove the chief executive “with or without cause,” and every director except Huang is independent.

Morningstar analyst Brian Colello told MarketWatch the situation “is starting to look like the worst-case scenario for Nvidia investors.” StoneX analyst Cody Acree told MarketWatch he did not think “the board has any choice but to act if there is evidence of a second affair.” Bernstein analyst Stacy Rasgon downgraded the stock from outperform to market-perform, while Raymond James kept its Strong Buy rating and said the reports likely do not change Nvidia’s business.

Rivals rise, earnings due Nov. 17

Shares of rival chipmakers moved the other way in after-hours trading: Advanced Micro Devices rose about 4% and Broadcom rose about 3%, while CoreWeave, which rents out Nvidia graphics processors, fell 6%. Nasdaq futures fell about 1%.

Nvidia reports quarterly results on Nov. 17. If the board removes Huang before then, a new or interim chief executive would face analysts within days of taking over. CBS News reported President Trump said the FBI is looking into Huang’s ties to Alice Huang, and House Republicans asked Huang for a closed briefing, with a Nov. 11 deadline to respond and a possible subpoena if he refused.

Reporting based on coverage by The Wall Street Journal, The New York Times, Reuters, Bloomberg, MarketWatch and The Mac Observer.