Jensen Huang Resigns. Will Nvidia Ever Recover?

Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Thursday, November 12th. In today's episode, we'll break down the shocking news that Jensen Huang has resigned as CEO of NVIDIA. We'll talk about what led to his ousting and what it could mean for the AI trade. We'll also tell you which chip stocks are benefiting from the NVIDIA crisis. Then stick around to the end of the show to find out why United Airlines is banning AI agents. We got a great show for you today. Let's go. Oh. Stocks ripped higher on Wednesday. The S&P 500 jumped 1.3% and the Nasdaq climbed by 1.6% as investors jumped back into the AI trade after CoreWeave's earnings. We broke down CoreWeave's numbers on yesterday's show. The stock ended up closing 25% higher yesterday and sparked a relief rally in AI names across the board. You know, it's been a pretty volatile stretch for the market, especially for tech stocks. Over the last two weeks, the Nasdaq has averaged almost a 2% move a day, up or down. That's the most volatility we've seen since the tariff chaos. Back in April of last year, it seems like the market can't make up its mind on how it feels about the AI trade. And I think we're going to probably have another volatile day today because Jensen Huang has resigned as CEO of NVIDIA. This news just broke. We'll get into all of that in just a second. This is pretty shocking news. We're going to stay on top of all of it and break everything down every morning. So if you're new here, it's a great time to get subscribed to the podcast if you haven't already and tune in every day to stay in the loop. Let's run through some headlines and we have to talk about NVIDIA and Jensen Huang. Jensen Huang is officially out as CEO of NVIDIA. NVIDIA announced this morning that Jensen has resigned effective immediately and CFO Colette Kress is taking over as interim CEO while the board searches for a permanent replacement. The situation with Jensen got a lot worse overnight and according to Bloomberg, the board pushed him out. The bombshell report last night was that the New York Times said that Jensen Huang had a second extramarital relationship, this time with an NVIDIA executive who reported directly to him. A few minutes after the New York Times report, the Wall Street Journal reported that the NVIDIA board was preparing to remove Jensen as CEO, and this morning, he is officially gone. The details from the New York Times report are pretty crazy. The second affair involved Kimberly Powell, NVIDIA's vice president of health care. Apparently, the two were caught on video being affectionate at a hotel in San Jose during NVIDIA's big conference back in March. When they were caught on camera, Jensen's security team reportedly got the person who filmed them together to sign an NDA. I mean, I don't even have any jokes here. Like, this is just a terrible situation. For everyone involved, Jensen was already under investigation for having an affair with an alleged Chinese spy. But I think most people, myself included, thought that he was going to be able to keep his job. But then a second affair with someone that reports directly to you. I mean, that is an automatic firing in corporate America. And the thing is, Jensen might have even more side chicks that we don't even know about. He could have had a mistress at every company that wanted his GPUs. I think it could be a lot messier than what we already know. And I think that's one reason why he's stepping down. The market is in complete shock. Nvidia stock fell as much as 10% this morning. It has recovered some of that as dip buyers stepped in. But, you know, many analysts on Wall Street have cut their price target on the company. Bernstein cut their price target in half. And tech analyst Dan Ives says the stock is worth 25 to 30% less without Jensen as CEO. You know, Jensen co-founded NVIDIA back in 1993. He's the only CEO NVIDIA has ever had. And more importantly, he had become the face of the AI boom. Under his leadership, NVIDIA became the most valuable company in the world and probably the most important company in the world as well. Not to mention, Jensen also uses influence and NVIDIA's balance sheet To invest in so many AI companies and financially backstop some of these companies too, like Corwi. So like the question everyone's going to be asking now is what does NVIDIA look like without Jensen and what kind of impact will him not being CEO have on the entire AI ecosystem? I mean, just taking a step back here, think about how fast this just happened. I'm still picking my job off the ground. This has to be one of the biggest fall from grace. I mean, just last week, Jensen had this reputation of being this visionary CEO and also this really cool guy that rocked the leather jacket, and now his reputation is completely tarnished and he lost his company. Jensen's downfall is going to be studied for decades, and we'll have to see what kind of impact it has on NVIDIA and the AI trade in general. I think the AI space is far long enough with established players like AMD and Broadcom. Not to mention Amazon and Google are also working on their own chips. That NVIDIA going through this crisis shouldn't just put a halt to innovation. But I don't know. We'll have to see. There's a lot of questions right now. Let me know in the comments on what you guys think about all of this. By the way, President Trump just chimed in on the situation this morning. He said that Tim Cook. Should be the next CEO of NVIDIA. Honestly, it's not a bad take given that Tim Cook is a supply chain genius and he has relationships in China. I should give a shout out to producer Mike. He had this take immediately right when the Jensen stuff was going down. I have the Slack message to prove it. I think if Tim Cook became the next CEO of NVIDIA, the stock would rip. Let's talk about some stocks making moves today. Every scandal has a winner, and this morning, the winners seem to be NVIDIA's rivals. AMD and Broadcom stock are moving higher as investors bet that they could take some market share from NVIDIA. NVIDIA's chips accounted for more than 60% of the total AI computing supply in Q2. But now with this NVIDIA crisis and Jensen gone and nobody permanently in charge, Big customers might start spending their money and buying from NVIDIA's competitors like AMD and Broadcom. AMD sells their own GPUs to train and run AI models. Broadcom is a bit different. They help companies like Meta and Google develop custom AI chips tailored to their needs. The market thinks that both could be winners from the NVIDIA crisis. AMD and Broadcom stock are both up around 5% this morning at the time of this recording. By the way, AMD CEO Lisa Su, who Who happens to be Jensen's cousin. She's one of the names people are floating as NVIDIA's next CEO, so that would also be pretty crazy. Now, on the flip side, shares of Nebius are getting crushed this morning, even after the Beat on earnings. Nebius has reported a 571% jump in revenue to nearly $981 million. That easily beat estimates. And the company's losses narrowed to 13 cents a share, down from the 50 cents a share a year ago. But the CEO said that some of the revenues the company expected to hit in December. We'll probably now show up in February. So their full year revenue will likely land at the lower end of their forecast. At the same time, Nebius is also spending more money. They expect to spend $27 billion in CapEx this year, which is up from the previous range of $20 to $25 billion. And the next year, Nebius is expected to hit $40 billion in CapEx. Which is way more than the $29 billion that analysts expected. So right now, Nebius is seeing less money come in and a lot more money going out. That isn't a great combo, especially for a company that's not expected to break even until the end of 2027. Nebius stock initially fell 10% after their earnings report, but now the stock is down more than 20%, likely because the news about Jensen resigning adding to the sell-off. Let's wrap the show with a fun fact. United Airlines is blocking AI agents from booking flights for you. United Airlines said that agents can still show flight options and prices, but the agent won't be able to complete the purchase on United's website. So that means that you won't be able to use Meta's Muse or OpenAI's Dots. from actually buying your next flight which is kind of funny because that's like the main use case all these AI companies point to United Airlines says that this is about data privacy and preventing brats from making accidental purchases but CEO Scott Kirby also said that he doesn't want to create another middleman and you know that kind of makes sense to me because before the internet The way you would book flights was through travel agents. And these airlines would have to give a cut to these travel agents. And then in the early era of the internet, people were booking flights through travel websites like Expedia. And again, the airlines had to give a cut to those travel websites. But now, airlines have finally established a direct relationship with customers thanks to loyalty programs. You know, at this point, I only book directly on an airline's website and not through a third-party platform. And that relationship is valuable. So United Airlines doesn't want Meta's Muse or OpenAI's Dots stepping in between them and their customer and potentially having to give them a cut down the line. So I can see why United is doing this. And this has kind of become a much bigger trend in general. Many websites have blocked AI agents. We talked a while back about how Amazon blocked Meta's Muse from its website. And it seems like eBay is also blocking Muse. So yeah, it's funny, all the money being poured into building these AI agents with the promise of making our lives easier, that only works if these websites allow the agents through the door. I still find my AI agents to be useful. I use Muse pretty much every day, but it does become pretty annoying when a website blocks my agent from accessing it. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. I mean, what a week it has been. And we still have one more day to go. I'm still kind of in shock of everything going on. I mean, who knows what's going to happen today? I'll believe anything at this point. If you guys have been enjoying the content and have like a few extra seconds, consider giving us a five-star rating on Apple, Spotify, YouTube. Wherever you listen to your podcast, drop us a comment on Spotify and YouTube as well. You know, all that engagement really does help us out. And it helps other people find the show. Thank you guys so much for listening, watching, and commenting. Shout out to Mike and V for all the work behind the scenes. And we'll see you guys back here tomorrow.