The big short-seller claims that Huida will soon become a "super cost-effective deal." Analyst: forcing Huang Renxun out may destroy the basis for bullishness

Huida's stock price plummeted for two consecutive trading days, which attracted the attention of Michael Burry, the prototype of the protagonist of the movie "The Big Short". He said that Huida may soon become a "very good deal." After Huida CEO Huang Renxun admitted his affair, Huida's stock price fell by about 10% in the past two trading days, and its market value evaporated by US$430 billion, making it the second-worst performing stock in the S&P 500 Index.

"I'm not in a hurry to hold (Huida stock) long-term right now, but I suspect the overall market may soon think this is a very good deal," Berry said.

He said that he did not think that Huang Renxun's controversy would severely damage Huida's business. The bigger doubt was how long Huida's competitive advantage could be maintained. "I still believe that Huida's competitive advantage will gradually shrink in the next five years." He warned that closer scrutiny of Huida's Chinese chip transactions and its activities in the AI ​​industry could exacerbate the loss of advantages.

Jay Goldberg, an analyst at Seaport Global Securities, pointed out that "if he (Huang Renxun) leaves, the bullish situation will also disappear." He is currently the only analyst with a "sell" rating on Huida stock. He said, "It seems impossible to imagine a Huida without Huang Renxun. If he is fired, the support foundation of the stock price will collapse. I don't know how likely this is to happen, but if it happens, it will be a devastating blow."

"Bloomberg" reported that before the Jen-Hsun Huang affair scandal broke out, Huida's stock price was already under pressure as investors' doubts about the sustainability of AI transactions increased. After the results of the U.S. midterm election impacted the expansion of AI data centers, Huida's stock price has fallen. This week is expected to fall for the sixth consecutive week, the first time since 2012. Since its stock price reached a new high on October 6, Huida's stock price has plummeted 29%, and its market value has dropped to approximately US$4 trillion from US$5.8 trillion one month ago.

Simeon Wallis, chief investment officer of Aprio Wealth Management, said, "Even before the midterm elections, the market's view on the cost of AI expansion has changed, and the election results have only exacerbated the uncertainty. Now we can only wait for the results of the independent investigation by Huida's board of directors, which makes the entire situation even more confusing." Huida's board of directors launched an independent investigation into Huang's possible targeting of Chinese intelligence operations.

He added, "It is too early to judge whether the situation has fundamentally changed. However, it is indeed difficult to have too much confidence in the short term."