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Nvidia Shares Close Down 4.3% After CEO Jensen Huang Resigns

Nvidia shares ended Thursday's session down 4.3% at $166.19 after Jensen Huang resigned as chief executive, following earlier losses of up to 14%.

Nvidia (NASDAQ: NVDA), the AI chip maker, closed down 4.3% at $166.19 on Thursday after co-founder Jensen Huang stepped down as chief executive. Huang, 63, also left the board after revelations of extramarital affairs, including one involving a suspected Chinese spy.

The shares fell as much as 14% before paring losses. Retail investors bought heavily as the price fell, while AMD and Broadcom rose about 6% each in the session.

The run-up

Huang co-founded Nvidia more than three decades ago and is its fourth-largest shareholder, with a 3.61% stake. The departure follows a sevenfold rise in the shares through early October, driven by surging AI computing demand, which at one point took Nvidia’s market value to nearly $6 trillion.

NVDA.US

The background

Huang also had an intimate relationship with a second Nvidia employee, according to two people familiar with the matter. She has not been named. Earlier this month, Nvidia’s board launched a probe, led by independent directors with outside counsel, into whether Huang had been targeted by a foreign intelligence operation, and expressed confidence in him then. Beijing denies the spy claim.

Chief financial officer Colette Kress is interim CEO while the company weighs internal and external candidates. Harvey Jones, a longtime director and former Synopsys chief executive, becomes Nvidia’s first board chair.

Michael Feldman, portfolio manager at ClearBridge Investments, said: “The risk is not that Nvidia suddenly loses its technology roadmap … that roadmap is largely visible for the next several years. The risk is execution. Jensen has been the chief conductor of an extraordinarily complex system.”

The US House Speaker said Congress is increasingly aligned on limiting chip exports to China, and CNBC reported Huang agreed to testify before Congress before Thanksgiving.

Kress wrote in a memo to employees that Nvidia will host a company meeting next Wednesday, the 18th of November. Nvidia is due to report results next Tuesday, the 17th of November.

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