AI company stocks plummet after Nvidia CEO Jensen Huang steps down following scandal
As the centerpiece of the AI ecosystem, the chipmaker finances infrastructure built around its chips - a strategy that has drawn scrutiny over circular funding and now risks weighing on the sector.
Nvidia CEO Jensen Huang resigned on Thursday after a scandal surrounding his affairs caused global AI-linked stocks to plummet. Chief Financial Officer Colette Kress will serve as interim CEO as the company searches for a permanent replacement. The scandal has deepened concerns over circular funding and regulatory risks within the AI infrastructure sector, which Nvidia has been instrumental in shaping.
Nvidia's market value has dropped below $4 trillion for the first time in over a year, and its shares fell by 10.3% in premarket trading. The scandal has also impacted neocloud firms, such as CoreWeave, IREN, and Applied Digital, which saw significant share price declines. Other chip-related companies, including Micron Technology, Sandisk, Western Digital, Lumentum, Coherent, Dell, Marvell Technology, Intel, Arm Holdings, and Texas Instruments, also experienced losses across the board.
Tech markets in Japan, South Korea, and Europe also faced jitters due to the turmoil at Nvidia. Short sellers have made $3.8 billion in paper profits, with the share price falling to $163, potentially increasing gains to $6.8 billion. Nvidia's stock price is now trading at about 12 times its 12-month forward earnings estimates, its lowest since November 2012.
Written by urgent.news from Jerusalem Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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