Nvidia shares crash over 10% after Jensen Huang's exit; $750 billion wiped out as AI stocks tumble

Nvidia shares plunged more than 10% on Thursday after co-founder Jensen Huang resigned as chief executive officer, triggering a broader selloff in artificial intelligence-linked stocks. The chipmaker has reportedly lost nearly $750 billion in market capitalisation since the controversy surrounding Huang began, while several US neocloud companies recorded double-digit declines.

According to CNBC, Nvidia shares fell more than 11% after the company announced Huang's departure and appointed chief financial officer Colette Kress as interim CEO.

The leadership shake-up follows reports of Huang's alleged extramarital relationships, including one involving a woman suspected by US authorities of spying for China. The allegations have raised concerns over corporate governance and national security, although no wrongdoing has been established.

Nvidia shares were trading around $156.54, down sharply from the previous session, when the stock had gained nearly 3%.

AI stocks suffer sharp losses

The selloff extended beyond Nvidia, hitting companies closely associated with artificial intelligence infrastructure and data centres.

Nebius shares plunged approximately 21%, while CoreWeave declined 14%. The Roundhill Neocloud ETF dropped 13%, reflecting widespread pressure on the sector.

IREN and Cipher Digital fell around 9% each, while Applied Digital declined 8%. TeraWulf lost 7%, and Core Scientific slipped 5%, according to market updates.

CNBC reported that Nebius had also fallen around 20% in premarket trading after reporting better-than-expected third-quarter revenue but issuing disappointing guidance.

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However, some semiconductor companies bucked the broader decline. Advanced Micro Devices gained approximately 1%, while Broadcom advanced 4%, suggesting investors were shifting towards other major chipmakers.

Oracle shares, meanwhile, declined around 3%.

Nvidia faces leadership uncertainty

Commenting on the leadership shake-up, Vested Finance said Huang's departure represents a significant transition for Nvidia, given his central role in establishing the company's dominance in the global artificial intelligence industry.

"Jensen Huang’s resignation marks a significant leadership transition for Nvidia, particularly because he has been instrumental in shaping the company’s position at the centre of the global AI industry. The immediate market reaction, with shares falling around 10% in pre-market trading, reflects concerns around leadership continuity, corporate governance and the future direction of the business," Vested Finance said.

However, the firm cautioned investors against confusing leadership uncertainty with deterioration in Nvidia's underlying business.

"However, it is important to distinguish between leadership uncertainty and business fundamentals. Nvidia’s competitive position is supported by strong demand for AI computing, its established CUDA software ecosystem and relationships with major cloud providers. These advantages are unlikely to disappear overnight."

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Vested Finance added that Kress's appointment provides some continuity, although investors will closely monitor how Nvidia manages the transition.

The firm warned that the stock could remain volatile as markets reassess Nvidia's valuation, growth strategy and execution risks.

"Given Huang’s central role in these areas, the market may attach a higher risk premium to the stock until there is greater clarity," it said.

Looking ahead, Vested Finance said Nvidia's long-term performance would depend on sustaining earnings growth, maintaining its technological advantage and executing its AI infrastructure strategy.

"The upcoming earnings announcement will be particularly important in helping investors separate the immediate leadership-related uncertainty from the underlying strength of the business," it added.

Nasdaq, S&P 500 decline

The turbulence weighed on Wall Street's major indices.

According to CNBC, the S&P 500 fell 0.8% shortly after Thursday's opening bell, while the technology-heavy Nasdaq Composite declined 1.5%.

The Dow Jones Industrial Average bucked the trend, rising 108 points, or approximately 0.2%.

Nasdaq 100 futures also extended losses to around 1.5%, reflecting investor concerns over the implications of Nvidia's leadership transition for the broader AI investment theme.

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Broader market risks intensify

Beyond Nvidia, investors were assessing geopolitical uncertainty and the outlook for US monetary policy.

Oil prices remained relatively stable, with West Texas Intermediate crude trading near $86 per barrel and Brent crude around $93.

Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute, cautioned against assuming a sustained market recovery.

“We would be a little circumspect about the bounce-back,” Samana told CNBC, citing persistent inflation, additional Federal Reserve rate hikes, higher long-term interest rates and growing AI data-centre regulation.

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