Nvidia shares plunged in Thursday's (12) trading session, the day the company confirmed the resignation of Jensen Huang after 33 years as CEO. The stock fell more than 14% at one point during the session, according to Reuters, and the company's market value threatened to close below $4 trillion for the first time since July 2025. Part of the drop was later reversed, but the sell-off already signals that the leadership crisis is weighing on the valuation of the AI sector as a whole.
The scale of the drop
Since last Friday, when the first reports about the crisis emerged, Nvidia shares had fallen by as much as 19%, wiping out more than $855 billion in market value, according to TechCrunch. Since Sunday alone, when the board announced it had opened an investigation, the loss was about $300 billion, according to Reuters. Over the past month, the company has lost more than $1 trillion in market value.
The shares were trading at about 12 times projected earnings for the next 12 months, the lowest multiple since November 2012, according to LSEG data compiled by Reuters. On the other side of the bet, short sellers accumulated almost $10 billion in paper profits this week, according to ORTEX.
The sell-off spread across the AI sector
The fall was not limited to Nvidia. CoreWeave, a cloud company backed by Nvidia, fell more than 9% after surging over 27% in the previous session. Marvell, Intel, Arm and Texas Instruments fell between 4.5% and 6.3%, and Oracle, which is expanding cloud deals using Nvidia chips, fell 2.6%. The Philadelphia chip stock index slid 1.3%.
Not all fell: AMD and Broadcom, Nvidia's rivals in AI chips, rose about 2% and 1.4%, respectively, as investors bet that the turmoil at the leader could open room for competitors.
What is at stake beyond the stock price
Huang's departure raises questions that go beyond the share price. According to TechCrunch, Nvidia has yet to finalize the $13 billion deal to acquire Hugging Face, the open-source platform, and the transition puts the company's support for the open ecosystem in question — Huang was one of the sector's biggest advocates of open-weight models. Researcher Nathan Lambert, of the Allen Institute for AI, said on X that Huang's exit would be "very very bad" for the cause of open models in the United States.
Nvidia's funding model also weighs on the stock: the company has invested billions in cloud providers and AI labs — $30 billion in OpenAI and $10 billion in Anthropic, according to TechCrunch — a strategy already questioned as circular funding, which may now weigh on the sector amid the leadership crisis.
On the other hand, the product roadmap continues: the Vera Rubin AI chip platform is already running — Google Cloud has offered Rubin instances since October, and Nebius said on Thursday (12) that its first Rubin systems are running. Interim CEO Colette Kress said the company will continue its work in accelerated computing and AI. The next test will be the quarterly results, scheduled for Tuesday, November 17.
Geekiki covered the resignation in Jensen Huang renuncia como CEO da NVIDIA após 33 anos; Colette Kress assume interinamente.
Sources
- Reuters, via Kitco — Global AI stocks sink as Nvidia CEO's exit deepens sector concerns
- TechCrunch — Nvidia's Jensen Huang resigns, chipmaker names CFO Colette Kress as interim CEO
- TechCrunch — Jensen Huang's exit puts Nvidia's support for open source in question
- Pixel Twelve — NVIDIA's AI Chip Roadmap After Jensen Huang
Featured image: Jensen Huang in 2024. Photo: Peter Dasilva / European Commission, CC BY 4.0, via Wikimedia Commons.
Transparency: This content was created, edited or reviewed with the help of artificial intelligence. The information was cross-checked against public posts on X and sources available on the internet. Consult the original sources to verify the full context.
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