NVIDIA's Board Was 'Very Deferential' To Jensen Huang: Expert

NVIDIA's shares rose nearly 3% in premarket trading on Friday, reversing a 4.34% decline on Thursday. The stock has dropped 27.28% over the past month. The gains come as the chipmaker faces a leadership transition following Jensen Huang's departure. Experts are split over whether strong demand for AI and a robust order pipeline can outweigh investor concerns about leadership uncertainty, competition, and legal investigations.

Some analysts believe the current valuation represents a buying opportunity, while others fear the stock could be a value trap.

Columbia Law School professor Dorothy Lund told CNBC that there is "a lot of evidence" that NVIDIA's board has been "very deferential" to Huang. She cited the board's lack of succession planning, the absence of a chair, and long-standing personal relationships between Huang and several directors as governance weaknesses. Lund also noted the board's flat management structure, with more than 60 executives reportedly reporting directly to Huang, which could create significant risks during a leadership change.

Despite Huang's exit, Yorkville Ives Dan Ives remains bullish on NVIDIA, valuing the company at $225 per share. Ives argues that NVIDIA's position in the AI infrastructure boom remains intact.

However, other experts remain cautious. Seaport Research's Jay Goldberg maintains a "Sell" rating, warning that customers might accelerate their transition to competitors like AMD and custom chip makers due to NVIDIA's limited chip capacity.

While NVIDIA's strong AI demand and order pipeline support a bullish case, leadership uncertainty, competition, and potential legal fallout could make the stock a risky investment.