Last Sunday, Nvidia (NASDAQ:NVDA) co-founder and then-CEO <a href="https://bitcomme.com/jensen-huang-just-resigned-from-nvidia-a-study-of-187-forced-ceo-exits-shows-what-could-happen-next/” title=”Jensen Huang Just Resigned From Nvidia. A Study of 187 Forced CEO Exits Shows What Could Happen Next”>Jensen Huang admitted to having an extramarital affair with someone who is an alleged Chinese spy. In the following days, The New York Timesreported that Huang also had an affair with a direct report. On Thursday, Nvidia announced Huang’s resignation.
At its peak, Nvidia had a market cap of $5.8 trillion. At market close on Friday, the stock had a market cap of $3.93 trillion. The stock is down 13% over the past week and 6% since Wednesday’s market close.
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So, investors think Nvidia is worth less without Huang in the corner office. Are they right?
From a tech standpoint, Huang has been a leader
There’s no doubting the impact that Jensen Huang had on Nvidia’s technical abilities. He steered the company to develop cutting-edge products in the GPU realm, along with other products to support them. Nvidia’s technology is best-in-class, and with Huang stepping down from the CEO role, that fact likely won’t change.
Furthermore, while Huang is unique, there are likely a handful of people within the Nvidia organization that could take over and do a great job.
The best company at leadership transitions has been Apple(NASDAQ:AAPL), as it has gone through several transitions and sustained its dominance every time. While Nvidia’s situation may be a bit more tumultuous than anything Apple has dealt with, Nvidia can survive.
So, investors need to make a decision about Nvidia stock. Is the only reason you invested in it because of Jensen Huang? Or is it because of Nvidia’s leading technology and position within the massive AI build-out?
For me, I invested in Nvidia because of its products and positioning, although having Huang at the helm was a nice touch. The core of my Nvidia investment thesis is still intact, and even though my position is dipping due to the news breaking this week and investors panic-selling, I’m still holding course because the business will likely be just fine.
Nvidia has high visibility into next year’s revenue
During last quarter’s conference call, Nvidia gave guidance for 70% revenue growth in 2027. Normally, companies don’t issue guidance six months in advance, but it’s likely that Nvidia has pretty much all of the orders it expects to receive locked in for 2027. It’s extremely unlikely that companies will start to cancel orders because of Huang’s actions or resignation, so investors should be able to count on that projection.
