Wall Street Assesses Risk of Jensen Huang's Departure: Succession and Product Delivery in Focus, Some Brokerages Downgrade Nvidia

November 12 - According to The Wall Street Journal, Nvidia's board of directors met on the evening of November 11 local time to discuss whether to remove CEO Jensen Huang. Nvidia has not yet announced a decision. Bloomberg, citing people familiar with the matter, reported that the board has been working with external agencies to find a successor and is considering appointing an interim CEO before a formal candidate is selected. According to data from the BIT stock platform, Nvidia's stock price rebounded about 2.9% during regular trading on Wednesday, and fell more than 8% in after-hours trading after the removal news emerged.

On the stock price front, some Wall Street figures expect that if Jensen Huang suddenly departs, Nvidia's stock could fall about 20% in the short term. Gene Munster, managing partner at Deepwater Asset Management, said that a founder-led company without a clear No. 2 executive is prone to valuation adjustments when leadership changes abruptly. Seaport Research Partners analyst Jay Goldberg also gave an estimate of about a 20% short-term impact, but he believes this is only the market's initial reaction to the news. Jensen Huang is Nvidia's only CEO to date and has long been at the core of management decisions. The subsequent stock price will still depend on whether the company can achieve a smooth transition.

Some investors also distinguished between short-term valuation pressure and the business itself. Investor Dan Niles speculated that if Jensen Huang leaves, CFO Colette Kress may serve as interim CEO. He believes interim management may first lower market expectations for performance, bringing Nvidia's price-to-earnings ratio based on estimated calendar 2026 earnings down from about 11 times to single digits. However, he expects the existing product pipeline can still support the company for about two years, and believes Nvidia's performance relative to the semiconductor index could bottom out as late as after next week's earnings report. This is a judgment on relative performance, not a prediction that the stock price will necessarily rebound by then.

On the supply chain side, TF International Securities analyst Ming-Chi Kuo pointed out that Jensen Huang's importance lies in his ability to quickly turn technical proposals from the engineering team into products the company is willing to commit resources to and promise to deliver. If a transition period begins, he believes a more pragmatic approach is to gradually reduce the company's reliance on Jensen Huang's personal decisions while preparing a succession plan. Whether the company can maintain the pace of new product R&D and delivery after the leadership change is more worth continued observation than who serves as interim CEO.

Brokerages have begun adjusting ratings. Baird downgraded Nvidia to "Neutral," citing reasons including uncertainty over Jensen Huang's tenure and an unclear outlook for data center spending in 2027. Bernstein downgraded Nvidia from "Outperform" to "Market Perform," halving its target price from $400 to $200. The team led by analyst Stacy Rasgon believes uncertainty remains around the investigation into Jensen Huang. Morgan Stanley removed Nvidia from its top picks list but maintained its "Overweight" rating. Nvidia plans to report earnings after the U.S. market close on November 17 Eastern Time, when performance guidance and new product delivery progress will provide more clues for judging whether this personnel turmoil has affected operations.