Global AI-linked stocks fell on Thursday after Nvidia CEO Jensen Huang resigned following a deepening scandal around his affairs, upending the chipmaker’s leadership and posing fresh risks to a sector already reeling with funding and regulatory concerns.
Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, the company said.
As the centerpiece of the AI ecosystem, the chipmaker finances infrastructure built around its chips – a strategy that has drawn scrutiny over circular funding and now risks weighing on the sector as its crisis deepens.
AI stocks have struggled after the Democrats swept the
midterm elections, including in states opposed to new data
centers, stoking fears that tighter regulation could slow the AI
infrastructure build-out.
Nvidia’s shares slid 10.3% in premarket trading and
put its market value on course to drop below $4 trillion for
the first time since July 2025 amid reports that the board was
deciding whether to oust Huang.
Nvidia-backed neocloud firms CoreWeave dropped
13.6% after surging more than 27% in the previous session when
its earnings ignited a relief rally in AI stocks.
Other neocloud stocks including IREN and Applied
Digital were also trading lower. Nebius
dropped 20% after the company said its 2026 revenue would come
in at the low end of its previous forecast.
Nvidia has lost about $300 billion in market value since the
board announced an investigation on Sunday into Huang’s
relationship with a businesswoman called Alice Huang, who is
alleged to be a Chinese spy.
“He’s the face of Nvidia and Nvidia has been front and
center of the AI build-out,” said Jun Bei Liu, lead portfolio
manager at Ten Cap.
“And if we look at how many new cloud data center businesses
have been sponsored in this circular financing world, it’s
pretty much all by Nvidia. And so it has quite a meaningful
ramification for what is to come.”
Memory chipmaker Micron Technology fell 5.8% and data
storage firms Sandisk and Western Digital eased
8.5% and 5.2%. Photonic product makers Lumentum and
Coherent and AI server maker Dell eased around
7% each.
Chip-related companies Marvell Technology, Intel
, Arm Holdings and Texas Instruments
dipped between 4.5% and 6.3%.
Shares of AMD and Broadcom, which also
produce AI chips and compete with Nvidia, however, rose 2% and
1.4%, respectively, on expectations that the turmoil at Nvidia
could create opportunity for rivals.
Tech-heavy stock markets across the globe witnessed jitters.
Japan and South Korea closed nearly 0.7% lower.
Tech stocks in Europe were also down about 1%.
Nvidia short sellers have made about $3.8 billion in paper
profits as of last close, and with the share price falling to
$163, those gains can swell to about $6.8 billion, according to
data analytics firm ORTEX.
Nvidia trades at about 12 times its 12-month forward
earnings estimates, its lowest since November 2012, according to
data compiled by LSEG.
Source: Khaleej Times