Nvidia share price hinges on Jensen Huang's fate, analysts warn

Nvidia's share price is expected to swing sharply depending on what happens to CEO Jensen Huang, who has admitted to an extramarital affair.

Bloomberg reported Tuesday (local time) that the bullish outlook for Nvidia's stock may hinge on whether Huang keeps his job, according to Yonhap.

Jay Goldberg of Seaport Global Securities, the only analyst to hold a "sell" rating on Nvidia, said the company's upside story would disappear along with Huang if he were to leave. "It's hard to imagine Nvidia without Jensen Huang," Goldberg said. "If he is ousted, the share price will collapse. I don't know how likely that is, but if it happens, the damage would be enormous."

Simeon Wallis, chief investment officer at Aprio Wealth Management, which holds Nvidia shares, said markets had already been reassessing the cost of building AI infrastructure before the midterm elections, and that the election results had added further uncertainty. "We'll have to watch what decision Nvidia's board makes — and that will only add to the uncertainty," Wallis said.

Even before the risk surrounding Huang emerged, Nvidia's share price had been on a downward trend.

The decline reflected growing doubts about the profitability of the hundreds of billions of dollars in capital expenditure being poured into AI infrastructure, as well as expectations that data center construction would slow following the US midterm election results.

In response, Nvidia's share price fell for six consecutive weeks — the first time it had done so since 2012.

However, a majority of analysts still expect Nvidia's third-quarter sales and profit, as well as its fiscal year 2027 figures, to surge more than 90 percent.

That growth trajectory, combined with a low valuation, is why Wall Street has maintained an almost unanimously positive outlook on the company.

In practice, 78 of the 82 analysts tracked by Bloomberg have a "buy" rating on Nvidia. The average price target stands at $320 — implying a gain of more than 90 percent over the next 12 months.

Huang showing up for work as normal

Meanwhile, Huang is continuing to report to work as normal.

Citing multiple sources, CNBC reported that Huang arrived at Nvidia's headquarters in Santa Clara, California, on Wednesday — one week before the company's quarterly earnings release — and chaired meetings, according to Yonhap.

Huang also presided over a regular Monday morning meeting attended by senior executives on Tuesday, and in his opening remarks acknowledged that he had not been faithful in his personal life.

However, he took no further questions on the matter and quickly moved on to the meeting's main agenda items, including key business issues.

Huang issued a statement Sunday in which he admitted to an extramarital relationship and apologized, telling employees, "I hope to earn back your trust."

The controversy has been further inflamed by reports that his affair partner is Alice Huang, who has been identified as a Chinese spy, unsettling opinion both inside and outside the company.

Huang, who co-founded Nvidia in 1993, has run the company with a hands-on style, receiving direct reports from roughly 60 senior executives. The personal scandal, now compounded by national security concerns, has begun to shake his standing as the company's leader.

yul@heraldcorp.com