A big valuation haircut could be coming to what was once the world’s most valuable company by market cap in Nvidia (NVDA) if newly embattled CEO Jensen Huang is forced to leave.
“We believe if Jensen was removed as CEO, Nvidia is worth a lot less (25%-30%) as a company/stock and would change the future direction of the company and create a dramatically different competitive environment around AI GPUs both in the US and globally especially for China,” Yorkville Ives partner Dan Ives and veteran tech analyst Dan Ives said on Tuesday.
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Nvidia’s board of directors has launched an independent investigation into reports that a woman CEO Jensen Huang had an affair with was allegedly spying on him for the Chinese government.
Huang admitted to the affair on Sunday in an email to employees.
Nvidia stock fell 4.27% on Monday as a dark cloud settled over Nvidia and its once-Teflon CEO’s future. Shares fell slightly in pre-market trading on Tuesday.
Added Ives, “Jensen is the core DNA of Nvidia and its AI success and ambitions are heavily tied to him staying on as CEO. Jensen is not replaceable..there is no other person on the management team bench that can step in seamlessly as CEO and that speaks to the key man risk now with Nvidia that investors will factor this dynamic to the stock.”
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Sozzi Unleashed morning show, the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team.
Source: finance.yahoo.com
