Nvidia shares slip again as Wall Street weighs chip giant’s future

Nvidia shares experienced a significant decline of more than two percent on Friday, as Wall Street opened in a mixed mood following the news of Jensen Huang's resignation. This setback pushed the market value of the AI giant below the $4 trillion mark. The chip manufacturer's shares initially climbed in pre-market trading, before slipping by 2.5 percent to approximately $162 in early trading.

The downfall followed a volatile session on Thursday, where Nvidia shares plummeted over 13 percent at the opening bell, only to recover slightly later in the day, losing just over four percent overall.

The scandal surrounding Huang's resignation has raised concerns about Nvidia's leadership and governance. Colette Kress, the chief financial officer, is serving as an interim chief executive while the board seeks a permanent replacement. The decline in Nvidia's shares has also affected the broader tech sector, with most tech stocks experiencing a downward trend on Friday. The S&P 500 gained 0.15 percent, the Dow Jones Industrial Average rose by 0.27 percent, while the tech-heavy Nasdaq Composite slipped 0.07 percent.

Rivals like AMD, Broadcom, and Intel also suffered losses, with the semiconductor giant Taiwan Semiconductor Manufacturing Company and chip equipment maker ASML seeing relatively minor declines. Some analysts view Nvidia's falling valuation as a potential opportunity for investors. James Demmert, the chief investment officer at Main Street Research, believes Nvidia's shares could find support around $165, despite the negative sentiment around the stock.

Nvidia currently trades at around 13 times forward earnings, even though its revenue grew about 60 percent year-on-year. However, GF Securities recently downgraded Nvidia, echoing concerns from other investors about the potential consequences of losing such an influential figure in the technology industry.