Scandals shake the chip giant: "Hard for Huang to stay"

The new information came late on Wednesday evening Swedish time, after Jensen Huang this weekend confirmed his affair with Alice Huang, who was identified as a Chinese spy by American authorities.

Meanwhile, the New York Times exposed yet another infidelity affair between the CEO and a high-ranking Nvidia executive, sending the stock down 9 percent in US after-hours trading.

- Confidence in Jensen Huang gets another thorn after the new information. If that's true, I think it's very difficult for him to stay. I initially thought that if it turned out to be limited to an infidelity affair and that no information was leaked to China, then he probably could have stayed, says Herman Ohlsson, semiconductor analyst at Brock Milton Capital.

- He has had an exceptionally bad reputation for being the most watched person on the entire planet for the past four years. This came like a bolt from the blue and was not something I could have imagined in my wildest imagination. He has appeared to be very trust-inspiring, safe and responsible.

He sees the negative price reaction as reasonable given the uncertainty at the same time that the events and the board's and the FBI's investigations raise questions.

- Will he stay or not? Will there be more restrictions on AI chips from the US as a consequence of this? What would that mean for the stock going forward? But really this doesn't affect the underlying demand for AI in any way so it should be limited to Nvidia, he says and continues:

- The earnings and cash flow in the company have not changed, but on the other hand it will of course be messy when a CEO as great as he is may potentially have to resign. Nvidia still makes the best AI chips and demand is still high while supply is limited so I don't think this will affect the company's sales going forward.

Jensen Huang co-founded Nvidia in 1993 and is currently the largest private owner of the company with just over 3 percent of the shares, corresponding to around 150 billion dollars. The largest owners are the American fund giants Blackrock and Vanguard.

The CEO is also a member of the chip giant's board, which lacks a board chairman.

- We are generally against the CEO being involved in the board, but in the US it is quite common. But of course he is not involved in the investigation itself, but it is independent members who run it, says Herman Ohlsson.

- Jensen Huang does not have any voting shares in Nvidia such as Meta or Elon Musk in Space X and Tesla, which means that the company's CEOs can stay regardless of what happens. But in Nvidia's case, it means that it will be easier for the board to get rid of the CEO.

CFO Colette Kress has been singled out as a possible CEO candidate if Jensen Huang leaves the CEO position, while there is no clear successor, according to Herman Ohlsson.

- She is sometimes seen at various conferences, but otherwise Jensen Huang runs a one-man show. He is as important to Nvidia as Steve Jobs was to Apple. There, too, the price reaction was negative when he left. But since then the share has continued to do well, so that suggests that many people think that the company is more dependent on people than it actually is. So it will not be decisive for the company if he leaves.