Nvidia faces an uncertain future after announcing the resignation of Jensen Huang, who served as one of the artificial intelligence industry's most visible champions and fuelled its boom with advanced chips and financing deals.
Colette Kress, Nvidia's finance chief since 2013, has taken over as interim CEO while the board looks for a permanent successor, though investors question whether she can maintain the pace of dealmaking driven by Huang.
Dan Coatsworth, head of markets at AJ Bell, noted that time will tell if investors warm to the interim approach while the AI industry moves at an incredible pace and spotting future opportunities remains difficult.
Kunjan Sobhani, a senior semiconductor analyst at Bloomberg Intelligence, stated that Huang's departure is unlikely to change earnings estimates for the 2027 and 2028 financial years, but pointed to longer-term risks involving succession, dealmaking, and scrutiny over China.
Following weekend reports of Huang's infidelity, share price losses wiped out $900 billion in market value between the previous Friday's close and Thursday's intraday low. In total, the chipmaker has lost about $1.8tn (€1.6tn) in market value since its record close on 6 October, when shares ended at $239.24.
Nvidia shares fell 4.3% to $166.19 on Thursday following the resignation announcement, trading near their 52-week low and at 13.7 times expected earnings compared to 38.9 times for rival AMD.
Prior to the resignation, analysts at Yorkville Ives estimated Nvidia was worth $225 a share without Huang as CEO, which was 25% below their $300 estimate with him at the helm. Several brokerages adjusted their price targets, with Bernstein and Baird cutting theirs to $200 and Citi lowering its target to $225 from $285.
Nvidia is scheduled to report earnings after the US market closes on Tuesday, 17 November, following a quarter to 26 July where revenue more than doubled to $96.2bn (€86.8bn). The company forecasts revenue of about $108bn (€97.5bn) for the upcoming quarter, compared to $109.3bn (€98.6bn) expected by analysts polled by Visible Alpha.
Source: Euronews. Read the original report ↗