Nvidia shares plummeted 9.63% in after-hours trading to $157.00. The trigger for such a sharp market reaction was a new report about a second extramarital affair involving the company's CEO, Jensen Huang. In the main session, by contrast, the stock closed up 2.92% at $173.73, making the subsequent drop especially striking.
The substance of the new report
According to the details disclosed, Huang was in a relationship with Kimberly Powell, Nvidia's vice president of healthcare, who reports directly to him. Five company employees confirmed the information. Both individuals are married to other people. According to available reports, Huang hung up when journalists called, and Nvidia declined to comment on the situation.
Nvidia's corporate code of conduct explicitly states that employees should avoid conflicts of interest, including those related to personal relationships.
Is Huang's resignation being prepared
A few minutes after the first publication, reports emerged that Nvidia's board of directors is preparing for Huang's resignation. The board may convene a meeting as early as today to consider his future at the company. No official decision or announcement has yet followed.
The market reaction was sharp given that on November 8 the board of directors stated its "confidence in Jensen and his management team" when it announced an investigation into the first affair. That affair, which Huang admitted to on Sunday, was with Alice Huang, a top executive at Megaspeed, whom U.S. authorities consider an employee of Chinese intelligence. China officially denies this.
Who could lead Nvidia
Nvidia has not disclosed a succession plan. Huang was one of the company's co-founders in 1993. "There is no succession plan," said Wedbush analyst Dan Ives. Among possible interim leaders, analysts name Chief Financial Officer Colette Kress.
Nvidia reports third-quarter results on November 17. It is one of the largest stocks in the S&P 500 — its performance affects index funds and pension savings across the country. Jim Cramer urged Nvidia investors to prepare for a future in which Jensen Huang is no longer the company's CEO.
Cryptalist analysis: The market reacted not so much to the ethical scandal itself as to the risk of management instability at a company whose market capitalization depends critically on its founder. The absence of a formalized succession plan increases the risk premium, and the upcoming November 17 earnings report becomes a key test of the stock's resilience. Investors should factor in heightened volatility until official statements from the board of directors appear.