Buyers stepped in after a 14% plunge, leaving new interim CEO to steer the chipmaker
Nvidia lost about US$182bn in market value on Thursday, closing down 4.34 percent after Jensen Huang resigned as chief executive.
CNN reported the stock fell as much as 14.35 percent after the opening bell, briefly erasing roughly US$600bn, before buyers pared the loss.
The chipmaker accounted for about 8.4 percent of the Vanguard S&P 500 ETF as of September 30, according to Vanguard data cited by CNBC, a weighting that has already put index concentration on the radar for Canadian advisors holding US exposure through passive products.
A 5 percent decline in Nvidia would cut that fund’s value by 0.42 percent and a 10 percent decline by 0.84 percent, based on an Experiential Wealth analysis reported by CNBC.
“It’s not a big deal,” said Philip Chao, a certified financial planner and chief investment officer at Experiential Wealth, who told the outlet that “most people are just reacting to the sensational aspect of this [news].”
Other AI-linked holdings could pull returns down further in the short term, advisors told the same outlet, though they said that outcome is not a given.
Shares of CoreWeave fell nearly 12 percent, Nebius sank 17 percent and IREN dropped 8 percent on Thursday, while AMD rose 3 percent and Broadcom gained more than 5 percent.
Nvidia’s board accepted Huang’s resignation as president, chief executive and director on November 11, effective immediately, according to the company’s Form 8-K filed with the US Securities and Exchange Commission.
Colette Kress, 59, executive vice-president and chief financial officer since 2013, was appointed interim chief executive and will continue as CFO during the search.
Harvey C. Jones was named the board’s first-ever chair.
Kress said in that release she is “committed to building on the extraordinary foundation Jensen created over the last 33 years.”
At least 10 Wall Street analysts turned more bearish this week, CNBC reported, citing FactSet.
Baird cut its target to US$200 from US$500 and downgraded the stock to neutral, Stifel lowered its target to US$205 from US$315 while keeping a buy rating, and Cantor Fitzgerald’s CJ Muse cut his target to US$250 from US$350 while maintaining an overweight rating.
“The stock is now pricing in a leadership discount, as the Jensen premium evaporates,” Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, told CNBC.
Jeremiah Buckley, an equities portfolio manager at Janus Henderson, offered the opposite read on CNBC’s Squawk on the Street, saying that “given where the stock is, that this could be a clearing event for the company,” with visibility for 2027 high and the product roadmap solidified through 2028.
Retail traders bought a net US$111m of Nvidia shares in the first 30 minutes of Thursday’s session, more than 40 times a normal open and the largest opening bid Vanda Research has recorded, CNBC reported.
Nvidia accounted for 61 percent of all retail net buying this week.
Nvidia’s board hired law firm Wachtell Lipton on Tuesday, to investigate intelligence allegations surrounding Huang, CNBC reported.
The company has said it had “no reason to believe” that national security or its secrets were compromised, according to The Associated Press.
Huang has agreed to testify before Congress ahead of American Thanksgiving, House foreign affairs chair Brian Mast told reporters on Thursday, as reported by CNBC.
“He has agreed to come,” Mast said. “We’re in negotiations for which day.”
Huang, 63, acknowledged an affair on November 8 without naming the woman, AP reported.
US officials concluded that Alice Huang, a former executive at Singapore-based Megaspeed International, was a Chinese intelligence asset.
Private intelligence firm Tesari told CNBC that businesses connected to her were linked with supplying Nvidia computing power to Huawei around December 2023, when she and Jensen Huang were first publicly seen together.
Nvidia will report third-quarter fiscal 2027 results on November 17, as previously scheduled, the company said in its CEO transition release.
