Nvidia shares fall more than 4% as board probe leaves succession question open
Nvidia shares closed down more than 4% on Monday after its board opened an investigation involving CEO Jensen Huang, and analysts say there is no clear successor.
Nvidia shares closed down more than 4% on Monday, even as the broader market rallied, after the company’s board opened an independent investigation into whether CEO Jensen Huang was the target of a foreign intelligence effort, Reuters and CNBC reported. Huang told staff on Sunday that he had been unfaithful to his wife and took “full responsibility.” The drop erased roughly $200 billion to $250 billion of market value, according to NBC News and the BBC.
The New York Times reported, citing people briefed on US intelligence, that the woman involved was a Chinese spy. China’s foreign ministry called the allegation a groundless smear. Nvidia’s board said it has confidence in Huang and no reason to believe national security or company secrets were compromised. President Donald Trump said the FBI was looking into the matter.
The episode has put the spotlight on succession. “The issue at Nvidia is that there is no clear successor to Jensen,” analysts at Melius Research wrote, according to CNBC. Huang, 63, co-founded Nvidia in 1993, owns just over 3% of its shares and had 33 direct reports this week, CNBC said.
Nvidia says Huang will keep leading the company during the probe, and most analysts do not expect the investigation to force him out, Reuters reported. An analyst at Rothschild & Co. Redburn said that could change if it finds “something materially more serious.”