WSJ: Nvidia's board is preparing to oust Jensen Huang; shares fell about 8% after hours
The Wall Street Journal reports Nvidia's board is preparing to oust CEO Jensen Huang, with directors able to meet as soon as Wednesday; shares closed the regular session at $173.73, up 2.87%, then fell about 8% after hours to around $160, and Baird and Bernstein both cut their ratings while no decision has been announced.
📊 Scorecard: our Bearish call on $NVDA is scored from $173.73, the last close before it ran. Its first result comes after the next close.
The News
Nvidia's board is preparing to remove co-founder and chief executive Jensen Huang, The Wall Street Journal reported late Wednesday, citing people familiar with the matter, with directors able to meet as soon as Wednesday to decide his future. Reuters separately reported the board was meeting late Wednesday. As of early Thursday, no decision had been announced and Huang remained chief executive. The board's latest public word is its November 8 statement expressing confidence in Huang, and its independent review — run by the law firm Wachtell Lipton plus a former federal prosecutor — is still running.
The market reaction was immediate. Nvidia closed the regular session at $173.73, up 2.87%, then fell about 8% in after-hours trading to around $160 — roughly $350 billion of market value. The regular close is about 27% below the October 6 record close of $239.24; the after-hours level of about $160 is about 33% below that record. Brokers moved fast: Baird cut Nvidia to Neutral on Wednesday and slashed its target to $200 from $500, and Bernstein cut it overnight to Market-Perform from Outperform, halving its target to $200 from $400. Stifel cut its target to $205 from $315 but kept a Buy, and Raymond James kept a Strong Buy.
The report landed later on Wednesday, after The New York Times reported Huang had a second alleged extramarital relationship, with Kimberly Powell, Nvidia's vice president of healthcare, an executive who reports directly to him. Neither Nvidia, Huang nor Powell has confirmed that account, and the Times said it had not seen the video underlying it. Semafor reported some directors favour chief financial officer Colette Kress as interim chief executive, but that is a single-sourced report. Nvidia reports third-quarter results on November 17, and House committee chairs have asked Huang to give a closed-door briefing on November 18.
The board's move turns a governance scandal into a leadership question at the heart of the AI trade.
Why It Matters
This matters because Huang is not just Nvidia's chief executive — he is the public face of the entire AI buildout, and Nvidia is the stock the whole trade is priced off. A board weighing his removal, a week before the company's own earnings report, injects a kind of uncertainty that no product launch can offset. Investors can model chip demand; they cannot model a boardroom fight, so they sell first.
The broker moves show how the market is reading it. Baird and Bernstein both cut the stock and slashed their targets to $200 — not because they think demand is falling, but because leadership uncertainty now sits on top of the shares. Bernstein's analyst said it plainly, keeping earnings forecasts unchanged while cutting the rating. That split — the business is fine, the leadership is not — is exactly why the stock fell after hours even though the regular session had closed higher.
The timing makes it worse. Nvidia reports third-quarter results on November 17, and House committee chairs have asked Huang to brief them behind closed doors on November 18. Whatever the board decides, it will land in the middle of the two most-watched events of Nvidia's quarter. And the board's own November 8 statement of confidence in Huang now reads very differently — either it was premature, or the board has changed its mind in four days.
Analyst's Take
Our call is Bearish. The demand story has not changed — Bernstein kept its earnings forecasts unchanged and said the move was driven by leadership uncertainty, not chip demand — but the leadership story now dominates the stock. A board preparing to remove the co-founder who built the company, days before earnings, is the kind of uncertainty markets punish first and ask about later, and the after-hours fall of about 8% says the market is pricing in a real chance Huang goes.
What to watch: any board decision in the coming days, the November 17 earnings report, and the November 18 House briefing. If the board backs Huang again, the shares have a clear path to recover — the business is still growing. If it removes him, the question becomes who runs the world's most important AI company next, and whether the succession is orderly. Until that is answered, the stock carries a discount no chip result can remove.
Are you bullish or bearish on this story?
By The Numbers
FAQ
What did The Wall Street Journal report?
The Journal reported late Wednesday, citing people familiar with the matter, that Nvidia's board is preparing to remove co-founder and chief executive Jensen Huang, with directors able to meet as soon as Wednesday to decide his future. Reuters separately reported the board was meeting late Wednesday. As of early Thursday, no decision had been announced and Huang remained chief executive.
Is the second relationship report confirmed?
No. The New York Times reported Huang had a second alleged extramarital relationship, with Kimberly Powell, Nvidia's vice president of healthcare, an executive who reports directly to him. Neither Nvidia, Huang nor Powell has confirmed that account, and the Times said it had not seen the video underlying it. Treat it as an alleged, unconfirmed report, not a fact.
How far have the shares fallen?
Nvidia closed the regular session at $173.73, up 2.87%, then fell about 8% in after-hours trading to around $160 — roughly $350 billion of market value. The regular close of $173.73 is about 27% below the October 6 record close of $239.24; the after-hours level of about $160 is about 33% below that record.
What did the brokers do?
Baird cut Nvidia to Neutral on Wednesday and slashed its target to $200 from $500. Bernstein cut it overnight to Market-Perform from Outperform and halved its target to $200 from $400, with analyst Stacy Rasgon saying the move was driven by leadership uncertainty, not chip demand, and keeping earnings forecasts unchanged. Stifel cut its target to $205 from $315 but kept a Buy, and Raymond James kept a Strong Buy.
What happens next?
Nvidia reports third-quarter results on November 17, and House committee chairs have asked Huang to give a closed-door briefing on November 18. The board's latest public word is its November 8 statement expressing confidence in Huang, and its independent review — run by the law firm Wachtell Lipton plus a former federal prosecutor — is still running. Semafor reported some directors favour chief financial officer Colette Kress as interim chief executive, but that is a single-sourced report.
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Source: Digital Trading Lab