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By Hugh Cameron
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The financial fallout for Nvidia over revelations about its CEO’s affair with an alleged Chinese spy may only be the beginning for the $4 trillion chipmaker, with reports of a second extramarital relationship and now the boss’ departure setting up what could be a more prolonged crisis.
Jensen Huang resigned as the CEO of Nvidia after 33 years leading the company, following reports of two extramarital relationships. In a press release on Thursday, the company said that the resignation would be effective immediately and that Huang will be replaced on an interim basis by Colette Kress, Nvidia’s executive vice president and chief financial officer.
Huang admitted to an affair on Sunday, telling his employees in an email that he was “unfaithful” to his wife and noting the widely reported “national security concerns” that the affair raised. Reporting from The New York Times and others connected the CEO to Alice Huang, a Chinese national of no relation whose company previously purchased chips from Nvidia and who is suspected of being an intelligence operative for Beijing.
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While Huang received support from some including President Donald Trump—who told reporters that the CEO had “absolutely had no idea that the person in question was a spy”—the company has been rocked by the episode. Its share price has plummeted since the initial report on the matter in October, though it also occurred amid a broader sell-off within tech stocks prompted by the midterm elections and fears over a slowdown in AI spending. Nvidia’s market capitalization has dropped by more than $1 trillion since then and was sitting at around $4 trillion shortly after Thursday’s opening bell for the stock markets.
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Despite mounting a slight recovery on Wednesday, Nvidia’s shares again collapsed in overnight trading after reports that its board was weighing whether to oust Huang and that he allegedly engaged in a second extramarital affair with Kimberly Powell, the company’s vice president of healthcare.
The exit of Huang—described by one analyst as Nvidia’s “hearts and lungs”—has shrouded forecasts for the company and its stock. Several Wall Street analysts quoted by CNBC said ahead of his departure that this could see the stock undergo another double-digit slide.
“Reports that Nvidia's board is considering his future have transformed what initially appeared to be a reputational issue into a potentially significant leadership risk,” Daniela Hathorn, senior market analyst at Capital.com, wrote in a note early Thursday. “Huang has been central to Nvidia's growth and its relationships with major AI customers, meaning an unexpected leadership change could create uncertainty at an already sensitive moment for the sector.”
Newsweek contacted Nvidia for comment on Thursday.
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How Huang’s Exit Could Impact Nvidia
Nvidia opened at $150.99 on Nasdaq on Thursday morning, its weakest start since June 2025. It closed at $173.73 on Wednesday and has shed around a quarter of its value over the past month amid a wider tech rout.
Dan Ives, a partner and tech analyst at Yorkville Ives, predicted that Huang’s departure could slash as much as 30 percent from Nvidia’s share price, and on Wednesday began warning about this possibility.
“We are lowering our price target from $300 to $225 now factoring in Jensen Huang is no longer CEO of Nvidia and removed likely over the next 24 hours by the Board,” Ives wrote on Thursday morning, describing the Times story as “the straw that broke the camel's back for the Board.”
In part informed by the possibility of his departure—as well as a weaker relationship and lobbying position with Washington—many other analysts have downgraded Nvidia or lowered price targets as the stories unfolded.
RBC Capital lowered its target to $230 from $330, citing the growing likelihood that Huang exits and the potential fallout from lingering national security concerns. Citi cut its target 21 percent to $225 from $285.
Bernstein downgraded Nvidia to “Market Perform” from “Outperform” while slashing its price target 50 percent to $200 from $400. In an interview with CNBC, Stacy Rasgon, a senior analyst at Bernstein Research, said that while Huang’s position was likely tenable earlier in the week, reports of a second affair with an employee made things “a lot messier” for the board at Nvidia.
Nvidia’s Dangerous Leadership Vacuum
“With the water pouring over the decks, he had no other choice [but to resign]. A quick exit gives the company a better chance to recover,” William Kovacic, a professor at George Washington University Law School and former chair and commissioner of the Federal Trade Commission, told Newsweek on Thursday.
Nvidia has appointed Executive Vice President and Chief Financial Officer Colette Kress as interim CEO until a permanent successor can be named, a task made more difficult by the lack of a clear succession plan.
Unlike other tech giants which anoint unofficial heirs—such as Apple with Tim Cook—Nvidia has long been viewed as having a uniquely centralized structure constructed around its CEO. Dozens of executives report directly to Huang, bypassing the typical second-in-command layer of the company, which was seen as somewhat insulating his position amid the recent developments.
In a filing with the Securities and Exchange Commission in 2025, Nvidia said that the company remains “highly dependent on the services of our longstanding executive team” and said that the “failure to ensure effective succession planning, transfer of knowledge, and smooth transitions involving executives and key employees could hinder our strategic planning, execution, and long-term success.”
As its founder, CEO and most prominent figure, Huang was the face of Nvidia, which John C. Coffee Jr., a Columbia Law School professor and corporate governance expert, called “an extraordinary flat organization with no intermediate senior executives.”
Coffee told Newsweek that “the collapse of Nvidia could produce unpredictable damage to the stock market.”
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“The fundamentals of the company remain strong, but were Huang to be forced out as CEO, it would be challenging to find someone with his breadth of knowledge of the industry and close personal relationships with the leaders of key suppliers and customers,” Paul Triolo, technology policy lead for Asia and the Americas at DGA-Albright Stonebridge Group, told Newsweek.
While its share price is undergoing some volatility, some analysts have argued that Nvidia’s strong fundamentals could keep it steady despite the departure of its CEO.
Arguing that there exists a “wide moat” between Nvidia and its rivals, Morningstar senior equity analyst Brian Colello gave the stock a fair value estimate of $310.
“Nvidia’s superior GPU hardware for AI, plus software ecosystem around CUDA, plus networking and interconnectivity expertise should allow the company to remain at the forefront of AI workloads,” he wrote following Huang’s exit.
However, he said Nvidia stock could be buoyed or sink further after its November 17 earnings report.
Nvidia’s Other Issues
A $1 trillion loss in market capitalization and the departure of its CEO may only be the beginning of Nvidia’s woes.
The company is already facing a lawsuit over allegations it artificially inflated the share price by concealing details of Jensen Huang’s alleged relationship with Alice Huang, which Kovacic described as “only the beginning as the cascade of bad news continues and depresses the value of Nvidia's shares.”
In particular, experts say reports concerning the alleged Chinese spy affair could see Nvidia surrender progress it had made on urging Washington to relax restrictions on foreign chip sales, while inviting significant federal scrutiny that is unlikely to thrill investors.
“Developments in the past week have stoked existing fears about the sale of Nvidia chips to China and increased the likelihood that Congress will seek to restrict such sales in the future,” Kovacic said.
Chris Miller, an associate professor at Tufts University and author of Chip War, told Newsweek on Wednesday that the scandal “will substantially reduce the Nvidia's role in shaping technology policy toward China.”
“Jensen's relationship with Trump was a key reason why the president has allowed the transfer of high-end chips to China and failed to enforce existing rules protecting U.S. technology,” he said. “Congress will now demand that this changes and is poised to pass legislation that might force Trump to take a tougher stance.”
However, this personal relationship does not appear to have been shaken by the reports.
On Monday, Trump told reporters that Huang told him he “had absolutely no idea that the person in question was a spy. And I really believe him."
Trump also advocated that Huang stay on as the company’s CEO, on Sunday calling him an “honorable guy” who “probably has an excuse for it.”
But Trump said that the FBI was “looking into" the affair between Huang and the Chinese executive, and lawmakers are already urging further probes into the company and its CEO.
“NVIDIA has reportedly received approvals to export hundreds of thousands of advanced AI chips to China, including to companies tied to China’s military, all while attempting to influence the debate over chip controls in Washington, D.C.,” Democratic Senator Elizabeth Warren of Massachusetts and Republican Senator Jim Banks of Indiana said in a statement released on Monday.
Should investigations find that Nvidia violated or assisted in the violation of chip export controls, the company could face fines and be subject to tighter regulation in the future—likely hurting future revenues and complicating the recovery in its share price.
Nvidia is set to report its third-quarter results next Tuesday at around 1:20 p.m. PT. That will be followed by an earnings call with executives, when the topic of Huang will likely feature heavily.
Contact Newsweek editors on this story: Daniel Orton and Dave Siminoff.
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