Nvidia shares came under renewed pressure, falling nearly 8% in overnight trading as uncertainty surrounding CEO Jensen Huang intensified following fresh reports about his personal relationships and the board’s consideration of his future.
The New York Times reported that Huang allegedly had an extramarital relationship with Kimberly Powell, Nvidia’s vice president of healthcare, who reports directly to him. The Wall Street Journal also reported that Nvidia directors were preparing to discuss whether Huang should remain CEO, raising the possibility of a major leadership change at the company.
The developments add to an ongoing controversy involving Alice Huang, a data center executive at a Singapore-based company who has been accused of having links to Chinese intelligence. Nvidia has launched an independent investigation into the matter. The company’s board previously indicated that it had no reason to believe confidential corporate information had been compromised.
Analyst Sees Leadership Change as a Major Risk
Wedbush analyst Daniel Ives believes the latest developments could represent a turning point for Nvidia. He has warned that Huang’s position may be increasingly difficult to sustain as scrutiny from investors, business partners and government officials grows.
According to Ives, the situation could affect Nvidia’s relationships with major customers and policymakers, while also raising questions about its succession plans and board composition. Potential federal investigations into semiconductor exports to China could add another layer of uncertainty.
Ives has also highlighted the potential financial consequences of Huang leaving the company. His valuation estimates put Nvidia at $300 per share if Huang remains CEO, compared with $225 per share if he departs.
The $75 difference represents a 25% decline in his estimated valuation, reflecting the premium he believes investors place on Huang’s leadership.
A leadership transition could create uncertainty over Nvidia’s strategic direction and its ability to maintain its competitive position in the AI semiconductor market. Huang has led the company since co-founding it in 1993 and has become closely associated with its rise to dominance in AI computing.
Wedbush Maintains Bullish View on Nvidia
Despite the leadership concerns, Ives believes Nvidia’s underlying business remains well positioned to benefit from the expansion of artificial intelligence.
He expects the company to weather the current controversy and retain its importance to the broader AI industry, given its established technology, customer relationships and position in the semiconductor supply chain.
Ives has maintained an Outperform rating and a $300 price target on Nvidia, pending further clarity about Huang’s future.
Wall Street Remains Optimistic
Broader analyst sentiment toward Nvidia remains positive despite the recent volatility.
Of the 35 analysts covering the stock, 32 have Buy ratings and three have Hold ratings, resulting in an overall Strong Buy consensus. The average price target stands at $311.17, suggesting approximately 79% upside from Wednesday’s closing price.
The contrast between the broader Wall Street consensus and Ives’ warning highlights the key question facing Nvidia investors: whether the company’s technological and commercial strengths can offset the uncertainty surrounding its longtime leader.
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