Nvidia Shares Fall 8.62% After Hours on Reports Board May Oust CEO

Nvidia shares dropped 8.62% in late after-hours trading on Wednesday, according to investingLive, after reports that the company's board was considering whether to remove CEO Jensen Huang. Rival chipmakers moved the other way: AMD gained 4.32% and Broadcom rose 2.39%.

The decline implies roughly $361 billion in lost market value compared with Wednesday's regular-session close, investingLive calculated. The outlet stressed that this is a change in implied equity value, not cash leaving the company.

How the leadership questions escalated

The turmoil has built over several days. According to investingLive, Nvidia's board announced an independent investigation on Nov. 8 while saying it was confident in Huang's leadership. The board also said it had no reason to believe the company's secrets or national security had been compromised.

On Nov. 11, The New York Times reported an alleged second extramarital relationship involving Huang and a company vice president who reports directly to him. investingLive noted that the allegations have not been independently established and that Nvidia has not publicly confirmed the reported relationship.

Reuters then reported that the board was meeting late Wednesday to consider removing Huang. The Wall Street Journal reported that the board was preparing to oust him. As of investingLive's analysis, no removal had been confirmed. Nasdaq futures slid 0.8% following the Journal's report.

Analysts and regulators add pressure

Analysts have begun to react. Bernstein became the third brokerage in two days to step back from the stock, cutting its Nvidia price target to $200, investingLive reported.

There is also a separate regulatory thread. The Information reported that the U.S. Commerce Department is finalizing additional restrictions meant to stop Chinese AI companies from remotely accessing advanced chips through overseas data centers. Because of this, investingLive said, it is hard to attribute the whole share-price drop to the leadership controversy.

Why chip stocks split

After-hours prices were $158.76 for Nvidia, $576.76 for AMD and $353.47 for Broadcom. investingLive said the gap shows investors distinguishing between individual chipmakers rather than selling everything tied to artificial intelligence.

The outlet cautioned against reading too much into the rival gains. Rising prices at AMD and Broadcom do not prove that money is moving directly out of Nvidia and into its competitors, it said.

Valuations, based on Nov. 11 regular-session closing figures from Finviz, tell a less obvious story. Nvidia's forward price-to-earnings ratio was 11, compared with 31.33 for AMD and 17.87 for Broadcom. On enterprise value to EBITDA, Nvidia stood at about 20.5 times and AMD at 81.1 times. These multiples were not recalculated for after-hours prices.

investingLive said the gap does not make Nvidia a better or worse investment, since differing earnings forecasts, product mixes, capital needs and growth expectations explain part of it.

Why it matters for shareholders and the AI chip market

For people who own Nvidia shares, directly or through funds, the central issue is leadership continuity at one of the world's most important technology companies, investingLive wrote. A drop of this size in implied market value shows how closely investors are tying the company's outlook to its chief executive.

The after-hours moves are not final. They reflect thinner late-session trading and could change once regular trading resumes. The valuation figures also rest on forward estimates, which investingLive noted can change.

The allegations about Huang remain unproven and unconfirmed by Nvidia. The board's earlier statement that it saw no compromise of company secrets or national security is the only company position described in the sources.

What to watch next

The outcome of the board's late Wednesday meeting is the key open question. The reports about Huang came just days before Nvidia's next earnings report, according to investingLive, which will give investors another view of the company's performance. The Commerce Department's chip-access restrictions, which are still being finalized, are another factor the outlet flagged.

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Around Prague, based on reporting by investingLive

Cover photo: Anderseidesvik / Wikimedia Commons, CC BY-SA 4.0, cropped