Huang fallout far from over: Nvidia stock flat, flowers at the gate, earning looms

Dubai: Nvidia shares are staging a recovery in premarket trade on Friday as investors weighed the fallout from Jensen Huang’s resignation. The stock is trying to gain back the losses from the 4.34 per cent fall it took in the previous session. But the pressure from Washington and Beijing keeps mounting.

Congress is moving first. Senate Banking chair Tim Scott asked Huang and Commerce Secretary Howard Lutnick to testify. Three House committees have asked Huang and general counsel Tim Teter on December 1 and 2, or face subpoenas. Huang has already agreed to testify behind closed doors before November 26.

Meanwhile those resignation repercussions are being felt far away in China too. Chinese AI shares tumbled on Friday on fears of tighter chip curbs. Speaker Mike Johnson has expressed that he sees a growing consensus in Congress on limiting exports to China.

Reacting to that, Beijing has warned that tighter US rules would threaten global supply chains further. President Donald Trump has called the scandal a “horrible thing”.

And there is more legal trouble for the chip maker and its co-founder as a shareholder class action suit has been filed against both. The case alleges that Nvidia and Huang inflated the share price by failing to disclose the affair. 

What are market players pricing in?

Bernstein has halved its price target from $400 to $200. Questar Capital Partners’ Richard Reyle calls the stock “uninvestable” without a succession plan. Analysts had warned the exit could cost up to 20% of market value. 

Vijay Valecha, Chief Investment Officer at Century Financial, expects sentiment to drive the first reaction. “That points to near-term volatility and some pressure on the valuation multiple,” he says, as investors price in a “key-person discount”. Yet he separates the man from the moat. “Nvidia’s edge rests on things that don’t leave with one person,” he argues. CUDA’s developer base, locked-in hyperscaler demand and the Blackwell roadmap all stay.

Valecha calls Kress “a stabilising choice” and an independent Chair “a meaningful governance upgrade”. Succession worries him, since several executives report directly to Huang. A sharp fall driven by leadership doubt “could present a buying opportunity”, he adds.

Daniela Hathorn, Senior Market Analyst at Capital.com, saw this more as a reputational issue turning into leadership risk. “Nvidia’s fundamentals haven’t changed overnight, but its story has,” she says. She warns that the wider AI trade could lose confidence going ahead and depending on the outcomes of the investigations.

How the story unfolded

Huang resigned as chief executive, president and board member of Nvidia on November 132, after 33 years at its helm. The board named CFO Colette Kress interim CEO and accepted the resignation a day earlier. Harvey Jones became Nvidia’s first-ever board chair and backed Kress for her grasp of customers, operations and finances. Kress remains CFO.

The exit followed days of turmoil. On November 8, the board launched an independent investigation after reports of a foreign intelligence effort targeting Huang. Huang admitted to an affair with a woman whom US intelligence officials believe is a Chinese spy. China denies spying. She was an executive at Megaspeed, an Nvidia partner the US suspects of helping China obtain restricted chips. 

The scandal has cost Nvidia about $500 billion in market value. Early in the session on Thursday, its valuation sank below $4 trillion, a first since 2025, before finishing the day only slightly above that level.

All eyes on Q3 earnings

Within hours of the news of Huang’s resignation, bouquets appeared beside the Nvidia sign in Santa Clara, with a single white candle among them. Women were seen crying nearby. Social media users joked that it looked like a company funeral. 

Nvidia reports its financial earnings on November 17. It had given a guidance of $108 billion in revenue. “A solid set of numbers may not be enough on its own,” Hathorn observes. Valecha asks investors to watch out for cloud and sovereign AI demand, plus clarity on succession news from Nvidia’s board.