NVIDIA Corporation (NVDA.US) posts worst weekly performance in 18 months; Jensen Huang's departure triggers market reassessment

NVIDIA Corporation (NVDA.US) shares suffered their worst single-week decline in more than 18 months this week, with market capitalization evaporating by more than US$620 billion. As founder Jensen Huang was removed by the board amid a scandal, Wall Street analysts broadly shifted to a wait-and-see stance, and market confidence in the outlook of the world's largest chip company faces a severe test. On Friday, November 13, NVIDIA Corporation shares closed down 2%, after falling as much as 4.7% intraday, widening the week's cumulative decline to about 14%. This was the worst weekly performance since April 2025, when Trump announced large-scale tariff policies that triggered turmoil in global stock markets. The scale of market value loss this week exceeded the market capitalization of 97% of S&P 500 constituents. The direct trigger for the sharp intensification of selling pressure this week was Jensen Huang's admission of an extramarital affair and reports that he had another improper relationship with an employee. NVIDIA Corporation's board subsequently removed him and appointed Chief Financial Officer Colette Kress as interim chief executive officer. As soon as the news broke, at least 13 analysts downgraded the stock's "Buy" rating, most of them this week. According to data compiled by Bloomberg, the company now has 15 analysts with a "Hold" rating, the most since 2023. Scandal Hits Ratings, Analysts Turn to Wait-and-See Wall Street analysts' attitudes toward NVIDIA Corporation have diverged markedly. According to Bloomberg-compiled data, although 66 analysts still maintain a "Buy" rating and only 1 recommends "Sell," the momentum of downgrades is accelerating. A team led by Truist analyst William Stein downgraded NVIDIA Corporation to "Hold" from "Buy" on Thursday, noting in a research report that Huang's departure could damage NVIDIA Corporation's corporate culture. The report said: This makes NVIDIA Corporation too risky for investment, and we can no longer make sufficiently confident forecasts for its revenue or earnings to maintain a Buy rating. Previously, NVIDIA Corporation shares had already come under pressure and pulled back after hitting a record high in early October. At that time, investors already had doubts about whether AI infrastructure spending could sustain high growth. After the U.S. midterm elections, several candidates who pledged to resist the rapid expansion of data centers won, further intensifying market concerns. The political fallout from the scandal continues to widen. Jensen Huang has agreed to appear before the U.S. Congress to testify under oath before the Thanksgiving holiday this month, and further disclosures at that time could continue to weigh on the stock price. Senator Elizabeth Warren, who is set to become chair of the Senate Banking Committee after Democrats take the Senate majority in January next year, publicly criticized NVIDIA Corporation and its dealings with the White House, and joined others in calling for deeper scrutiny of the role of U.S. Commerce Secretary Lutnick. Warren said officials "must explain why export control loopholes were not closed and take action immediately." Quarterly Results Approaching, Uncertainty Remains At this sensitive juncture, NVIDIA Corporation is scheduled to report quarterly results on Tuesday, November 17. This earnings report will be the company's first major financial data release since Huang's departure, and the market will pay particular attention to its revenue guidance and management's strategic remarks. Currently, Colette Kress is leading company operations as interim CEO, and there remains considerable uncertainty externally over whether NVIDIA Corporation's leadership transition will be smooth and whether its core strategy can continue. Analysts generally believe that before more details emerge, the stock will find it difficult to shake off valuation reassessment pressure in the short term. This article is reposted from "Wallstreetcn," author: Bao Yilong, GMTEight editor: Li Cheng