The Future Fund’s Gary Black cast doubt on Huang staying on as Nvidia CEO, while Dan Ives called the incident a “black eye moment.”
Nvidia shares tumbled over 4% in overnight trading.
Retail sentiment climbed higher in the ‘extremely bullish’ zone.
After months of reports about Nvidia CEO Jensen Huang’s alleged relationship with a suspected Chinese spy, Huang acknowledged being unfaithful to his wife in a memo to Nvidia employees on Sunday and said the company’s board was launching an investigation, even as analysts debated the fallout from what could become the biggest controversy to hit the chip giant at the center of the AI boom.
Nvidia shares plunged 4.2% in the overnight session ahead of Monday. “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did… “I am fully committed to NVIDIA and will work to earn back your confidence,” Huang wrote in a memo to Nvidia staff, according to reports.
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Nvidia confirmed the independent investigation in a public statement. “While the Board has no reason to believe that either national security or NVIDIA secrets were compromised, the Board’s inquiry will examine all available information,” it said.
The developments follow a series of reports that Huang was targeted by former Megaspeed International executive Alice Huang, whom the U.S. government suspects was recruited by a Chinese spy agency.
Huang had previously said he had a “normal” business relationship with the woman, who is no longer at Megaspeed.
Analysts Speculate Huang Could Lose CEO Title
“I doubt Jensen Huang will be able to remain as $NVDA CEO. This could put short-term pressure on the stock of the second most valuable company in the world,”
Gary Black, managing partner at The Future Fund, said the incident could lead to Huang stepping down as CEO as well as short term pressure on the stock, adding that the company has “no natural successor.”
“While Huang has not committed any crime or tort, his code of conduct and judgment will be called into question which will likely result in his removal by the NVDA Board. While I don’t see long-term value impairment, many portfolio managers will reduce their $NVDA holdings in the coming weeks as a result of uncertainty over who could succeed Jensen as NVDA CEO,” Black wrote in an X post.
Yorkville Ives partner Dan Ives called it a “black eye moment” for Huang, which will spark “multiple congressional inquiries at a minimum.”
Nvidia and Huang will face several investigations, said Patrick Moorhead, chief analyst at Moor Insights & Strategy. There will be probes by the U.S. government, Nvidia’s board, and congressional committees Moorhead expects the debate to focus less on party lines and more on how tough the U.S. should be toward China.
“My DC sources tell me this will be ‘China Hawks vs. Uber China Hawks.’ Also, that this will also make it likely that some form of export control legislation will pass if not in this year’s NDAA, it will pass next year,” Moorhead wrote in an X post.
“It is hard not to read the news over the weekend as negative given it brings the stewardship of one of America’s most important companies, and the architect of the U.S. AI trajectory, under debate, as well as calling judgment into account,” Bernstein said in an investor note, according to Bloomberg.
Notably, Sen. John Cornyn, R-Texas has called for a congressional investigation, according to his X post.
Trump, Business Elite Support Huang
President Donald Trump called Huang a “fine person” and said he should stay on as leader of Nvidia. “I have not spoken to him about it,” Trump told reporters on Sunday before returning to Washington. “I just know he’s a fine person, but you never know what is going on.”
Billionaire investor Bill Ackman said people should offer support to Huang and his family. “@JensenHuang is human. And he is an incredible human. Even incredible humans make mistakes. He takes full responsibility as he should.”
Tesla and SpaceX CEO Elon Musk appeared to support the view that Huang made a mistake without bad intention and that he is central to the U.S.’s AI leadership. He replied “I agree” to an X user post supporting Huang.
Retail View On Nvidia
NVDA was the top trending ticker on Stocktwits at the time of writing, even as the retail sentiment for the stock climbed higher in the ‘extremely bullish’ zone.
“Jeff Bezos had an affair. Bill Gates had an affair. Elon Musk had an affair. Neither scandal destroyed Amazon or Microsoft or TSLA,” a trader said. “If there’s evidence of compromised technology or national security, absolutely investigate it. But until then, let’s distinguish personal misconduct from actual business fundamentals.”
Another wrote, “$NVDA I will see you mid December when the price is 250,” forecasting a 60% gain.
NVDA stock is down 21% from its peak in early October and remains marginally up year to date.
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Yuvraj Malik has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
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