Investors worry the AI trade might lose Nvidia’s largesse after Huang

As Nvidia's co-founder and CEO Jensen Huang stepped down on Thursday, investors expressed concerns about the future of the company and its ability to continue funding the AI boom. Huang's exit was seen as another pressure point for the global market's most crowded trade. In response, shares of Nvidia dropped nearly 5% and those of its customers, including data-center firms CoreWeave and Naver, initially suffered losses while rivals Broadcom and AMD saw gains.

Nvidia's leadership has been crucial to the AI revolution, its chip technology leading the way and the company financing its customers with billions of dollars in equity investments and guarantees. With Huang gone, investors are questioning if Nvidia's backing of the AI boom will be reduced, potentially cutting off funding to smaller companies that rely on it.

The concern is that Nvidia's departure could disrupt funding for smaller companies in the AI sector, but experts believe the company's advanced GPUs will remain a key demand driver, ensuring the AI trade's continued growth.