Musk says Nvidia will lose 'critical' deals without Jensen Huang

Last Sunday, Nvidia co-founder and CEO Jensen Huang admitted to having an affair with someone who is believed to be a Chinese spy, followed by an affair with a direct report. Nvidia announced Huang's resignation on Thursday. After peaking at a market cap of $5.8 trillion, Nvidia's stock fell to $3.93 trillion by Friday, a 13% decline over the past week and 6% since Wednesday.

Investors are questioning Nvidia's value without Huang at the helm. However, Huang's technical expertise and leadership are irreplaceable, and there are likely capable successors within the company. Apple's leadership transitions have been smooth, suggesting Nvidia can navigate this change effectively. The company's market dominance and cutting-edge products in GPUs are unlikely to change with Huang's departure.

While Nvidia's stock price has dropped, investors should consider whether they invested solely due to Huang or because of the company's technological leadership. Given Nvidia's strong fundamentals and guidance for 70% revenue growth in 2027, the stock appears undervalued at around 10 times next year's earnings estimates. Investors should not sell their Nvidia shares based on this news, as the company's core business and long-term prospects remain strong.