Nvidia is on track for its longest weekly losing streak since 2012, with its market value plummeting by $1.6 trillion. The chip giant, which had been the world's most valuable company for much of the year, has seen its stock drop 29% over six consecutive weeks, falling below Apple in the process. The decline accelerated this week following the resignation of CEO Jensen Huang, who stepped down after two extramarital affairs became public.
Huang, who co-founded Nvidia and led it for 33 years, resigned on Thursday after the board convened late Wednesday. The first affair, with an alleged Chinese spy, was reported over the weekend, while the second involved an employee. The board named finance chief Colette Kress as interim CEO while searching for a permanent successor. Nvidia shares fell 4.3% on Thursday, bringing their weekly loss to 11%.
Analysts expect a challenging transition period for Nvidia. Gil Luria of D.A. Davidson lowered his price target to $200 from $300 but maintained a buy rating. He noted that the market has adjusted for the transition. Last week, before Huang's departure, Nvidia shares dropped about 9%, partly due to concerns about rising interest rates and the impact of midterm elections on AI development.
Nvidia is scheduled to report quarterly results next week, with analysts projecting 91% year-over-year revenue growth to $108.9 billion. However, Oppenheimer analysts warned that fundamentals may take a backseat near term due to Huang's departure, which could create a lingering share overhang.