Nvidia (NASDAQ: NVDA) shares plunged more than 10% to $155.57 in Thursday’s premarket trading after reports emerged that its board was considering removing co-founder and CEO Jensen Huang, even though the board had publicly expressed support for his leadership just days earlier.
The Wall Street Journal reported that directors were preparing to remove Huang amid reports of two extramarital relationships. Reuters separately reported that the board was meeting late Wednesday to decide whether he should remain chief executive.
The board had also been working with an outside firm to identify potential successors and was considering appointing an interim CEO while searching for a permanent replacement, according to Bloomberg. Nvidia had not announced Huang’s removal or any other leadership change by early Thursday.
The latest allegation emerged Wednesday, when The New York Times reported an alleged relationship between Huang and Kimberly Powell, Nvidia’s vice president of healthcare, who reported directly to him. The allegation surfaced while Nvidia’s board investigated reports that Huang was the target of a foreign intelligence operation.
Nvidia’s Earlier Investigation and Leadership Uncertainty
On November 8, Nvidia’s board publicly expressed confidence in Huang and his leadership team and announced an independent investigation into reports that a foreign intelligence operation had targeted him.
That investigation followed reports of Huang’s relationship with Alice Huang, a former executive at Nvidia customer Megaspeed. According to Reuters, U.S. intelligence officials were investigating Alice Huang over allegations that she had facilitated shipments of Nvidia chips to Chinese firms. The New York Times separately reported that U.S. intelligence officials suspected China’s Ministry of State Security had recruited Alice Huang to gather information about Jensen Huang. Megaspeed itself had faced U.S. scrutiny over suspected diversions of advanced chips to China.
Jensen Huang previously said Nvidia’s dealings with Megaspeed were proper and that the company had found no evidence of illegal chip diversions. Megaspeed denied involvement in illicit chip transfers to China, while China’s Foreign Ministry rejected allegations that a Chinese intelligence operation had targeted Nvidia’s CEO.
In its November 8 statement, the board said it had no reason to believe Nvidia’s confidential information or U.S. national security had been compromised. Huang separately acknowledged being unfaithful to his wife and pledged to cooperate with the investigation.
Two days later, Nvidia’s independent directors confirmed they had retained former federal prosecutor Joon H. Kim of law firm Wachtell, Lipton, Rosen & Katz to conduct the review.
Nvidia has not publicly announced any findings from the review or clarified whether the review covers Powell’s alleged relationship.
Under Nvidia’s bylaws, a majority of directors can remove the company’s chief executive with or without cause. The company has 11 directors, including Huang, and considers the other 10 independent.
Huang has led Nvidia since co-founding the company in 1993. The company has not publicly named a potential successor.
Nvidia Shares Reverse Gains as Analysts Cut Ratings and Price Targets
Nvidia closed Wednesday’s regular session at $173.73, up 2.87% after two consecutive declines. However, shares fell about 8% in after-hours trading after reports emerged of a possible leadership change, reversing their gains from the regular session.
Separately, NVIDIA Tokenized bStocks (NVDAB), a tokenized instrument linked to Nvidia shares, traded at $156, down 11% over the past 24 hours, according to CoinMarketCap. The tokenized instrument trades around the clock, so its 24-hour percentage change cannot be directly compared to Nvidia’s stock performance during regular or after-hours trading.
Uncertainty surrounding Huang’s future also prompted several Wall Street firms to reassess Nvidia’s stock.
Bernstein downgraded Nvidia from Outperform to Market Perform and halved its price target from $400 to $200. Analyst Stacy Rasgon identified uncertainty surrounding Huang’s continued leadership as a major risk, while maintaining that the company’s underlying business fundamentals remained strong.
Oppenheimer lowered its rating from Outperform to Perform and withdrew its price target. Analyst Rick Schafer cited the absence of an obvious successor and warned that Huang’s departure could trigger an exodus of key personnel and threaten Nvidia’s pace of innovation.
Stifel reduced its price target from $315 to $205 but maintained its Buy rating. The firm now expects a leadership transition to be the most likely outcome but remains positive on Nvidia’s underlying business.
The leadership uncertainty comes just days before Nvidia’s fiscal third-quarter 2027 earnings announcement on November 17. The company has scheduled a conference call at 5 p.m. ET, with written financial commentary from Chief Financial Officer Colette Kress expected ahead of the call.