Nvidia announced Thursday morning that, following a board meeting, Jensen Huang would step down as CEO after more than 30 years leading the company, CNBC reported. CFO Colette Kress was named interim CEO. The board convened Wednesday evening after The New York Times reported that Huang had a second extramarital affair, this time with an employee. Huang had already admitted a relationship with a woman U.S. intelligence believes is a Chinese spy.
At least six analysts downgraded the stock between Wednesday night and Thursday morning, according to CNBC, and shares were down more than 12% shortly after the open, bringing one-month losses close to 25%. Melius Research cut its target to $185 from $315, Evercore to $186 from $465 and Bernstein to $200 from $400. Oppenheimer removed its target, and William Blair and KeyBanc also downgraded. Citi kept a buy rating but trimmed its target to $225 from $285.
Several analysts said the business itself is intact. Bernstein's Stacy Rasgon said the company should not have huge issues operating during a leadership search but expects more allegations to come. KeyBanc's John Vinh said finding a successor with Huang's vision will be challenging. Evercore's Mark Lipacis cited The New York Times report that the board hired Wachtell Lipton to investigate, and quoted the board saying it has no reason to believe national security or Nvidia secrets were compromised.
Former Nasdaq CEO Robert Greifeld told CNBC that long chip development lead times and long customer contracts give a new CEO room to maneuver, and that existing chip plans will not change.
