Nvidia shares fell nearly 3.5% in early trading on Friday, extending a bruising sell-off following Jensen Huang's sudden departure as chief executive and dragging the Nasdaq Composite to its lowest level of the session. The decline showed how the leadership crisis at the world's most valuable chipmaker is adding fresh uncertainty to an already volatile artificial intelligence trade.
At around 10:15 a.m. ET, Nvidia was down 3.28% at $160.7, after touching an intraday low of $161.22. The stock had lost more than 4% in Thursday's session. The Nasdaq Composite dropped 1.3% to 25,033 while the S&P 500 slipped 0.58% to 7,548.41.
The pressure follows Huang's resignation amid reports of multiple extramarital relationships, including one with a woman whom US intelligence officials reportedly suspect of having links to Chinese intelligence. These allegations have not been established as fact. Nvidia's board had also launched an investigation into the matter before Huang stepped down.
Chief Financial Officer Colette Kress has taken charge as interim CEO. The board has begun searching for a permanent successor and will consider both internal and external candidates. Investors now face questions about leadership continuity at a company whose founder has been central to its strategy, customer relationships and expansion during the AI boom.
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Nvidia valuation reaches a 14-year low
The sell-off has sharply compressed Nvidia's valuation. Reuters reported that the stock's forward price-to-earnings multiple had fallen to around 12 times expected earnings, its lowest level since 2012. The shares have also dropped more than 30% from their October record high.
However, the valuation decline does not necessarily signal weakening chip demand. Analysts have largely maintained expectations for strong earnings growth, with demand for Nvidia processors still expected to exceed supply.
That outlook faces a key test next week. Nvidia is scheduled to report its third-quarter fiscal 2027 results on November 17. Analysts tracked by LSEG expect October-quarter revenue to rise 92% year-on-year, while net profit is forecast to increase 89% to more than $60 billion.
Investors will look beyond the headline numbers for Kress's assessment of demand, supply constraints and the company's growth plans. Her comments may carry unusual weight as Nvidia begins its first earnings cycle without Huang at the helm.
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The broader market also faced inflation concerns on Friday. US producer prices rose 0.3% in October, below economists' 0.4% forecast, but the annual increase reached 6.5%, the largest since November 2022. That kept expectations of further Federal Reserve tightening in focus.
For Nvidia, the immediate challenge is to demonstrate that its AI business can maintain momentum through a leadership transition.
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