Have Investors Put Their Money Into Nvidia The Company, Or Into Jensen Huang The Man?

Jensen Huang, the man who built NVIDIA into an AI powerhouse, resigned today as CEO. Just four days ago, NVIDIA's board publicly expressed confidence in him. But today, they let him go. His departure follows reports of two extramarital affairs, including one involving a businesswoman suspected by U.S. authorities of ties to Chinese intelligence. Wang has admitted to being unfaithful. NVIDIA says it has no reason to believe that company secrets were compromised. But the financial fallout is staggering. Since November 5th, almost half a trillion dollars has been wiped from NVIDIA's stock market value. And now investors face an extraordinary question. Were they investing in NVIDIA or were they investing in Jensen Huang? The company said in a statement today, Jensen's contributions to NVIDIA are profound. NVIDIA is one of the most consequential technology companies in the world. The board and the company thanked Jensen for his immeasurable contributions to the company and the industry. And joining me now is Dennis Dick. He's a veteran trader and market analyst who has run with the Bulls and the Bears from Wall Street for some two decades. Dennis, it's good to have you back. I mean, it's been quite a heady 24 hours, some, what, half a trillion dollars in market value gone in just over a week. Are we witnessing the most expensive personal scandal in corporate I think so. I mean, when you have a company the size of NVIDIA falling as quickly as it has, traders are taking note here. This has been an unbelievable move. I was trading live last night and we got the news breaking just before five o'clock that there was a second affair. And I'm like, oh my gosh, they're going to fire him. Before when it's one, you think, okay, well, NVIDIA can get past this. The board can move on. They're probably not going to let him go. As soon as you heard this second one, they're like, they're going to let him go. So I'm like, who's the succession plan? What's going to happen here? Just all of a sudden, a whole bunch of questions just need to be answered. And the stock goes into free fall. It goes from $170, $165, $160, $155, $150. Bottom this morning at $148.80 on the obviously official news of the resignation. And we have bounced from there. But there's still a lot of questions here going forward. Well, should investors, should they be relieved with his departure? Or should they be worried even more? Well, that's it. There's no succession plan here. You think about like, I've had traders talking to me and saying, well, you know, Microsoft, Bill Gates was there. They were fine afterwards. Steve Jobs and Apple, they were fine afterwards. There were succession plans in place. Steve Jobs was sick for a very long time. He set up Tim Cook for success in the succession of Apple. This with NVIDIA is not the case. This is coming on fairly suddenly. Maybe the board knew about it. We don't know how long they knew about it. Maybe they've known for a few weeks. But there's not this succession plan in place here. And let's be honest, this is not a simple company to run. I mean, you were speaking about the godfather of AI here when Jensen Huang. This person has the biggest shoes to fill out there. So who can do it? You know, some of you are saying, well, Lisa Su could do it. Well, Lisa Su is not going to leave AMD. I mean, you know, this is like, this is, and AMD is trading up on this because obviously she becomes now, you know, if he was the godfather of AI, she probably becomes the godmother of AI. This is not going to be the case. Lisa Su is not coming here. Donald Trump this morning talking about, well, maybe we could bring in. Tim Cook here to come in and replace him. I don't know if that's going to be the case here either. Obviously, they put Colette Kress in place. She's been with the company since 2013. Interim CEO, I'm sure she'll do a fine job. But who is the name? Who is the person with the vision that Jensen Huang has had? I mean, he was working on AI 10 years ago before anybody was even speaking of AI. The visionary here... Let me just interrupt and ask you then, you may have seen what Elon Musk posted yesterday. He posted on social media that it would be an honor to hire Jensen Huang. I mean, so is there more to that than just maybe some, you know, tech bro flattery here? Could you imagine Huang going to work for Elon Musk? Well, and I don't think it's a coincidence that SpaceX is fairly strong here today after that commentary here. Like, nothing like that would be imminent. I think with this incident that's happened here now, and obviously the resignation, he's probably going to get out of the, you know, go back, you know. Get your stuff, figure yourself out, take some time. Time is the key here, because time can heal all wounds. But does he re-merge with another tech company? He's the number one free agent out there. I mean, once we get past this, once we get past the allegations, and time will make people forget. I mean, he is the number one free agent out there. Nobody's had the vision that this guy has had. Could you imagine a SpaceX-Tesla combo, maybe, with Jensen Huang and Elon Musk behind it? That's exciting. I mean, that is not imminent, but could that be something that happens in the future? Absolutely. Elon Musk said it today that it's possible. Let me ask you something about the past. We know that President Trump knew about the possible Chinese spy connection more than a year ago, and we know that Jensen Huang was never warned. Warning him may have prevented this scandal, and it may have prevented this share price meltdown that we've seen. What do you expect angry shareholders to do about this, or do you expect them to do anything? Well, there could be class action suits. I mean, lawyers sue, and we see class action suits all the time. So I'd imagine there's going to be some class action suits coming here. There's a tremendous amount of market cap lost here. Some investors lost some serious money here. So I would imagine there will be class action suits against NVIDIA, maybe even Jensen Wong himself. But, you know, going forward here is, you know, what do you do as an investor is the question. I actually am an investor in NVIDIA. I've had it in my long-term retirement account for about three and a half, four years here now. And people ask me, are you selling today, Dennis? I'm like, I don't think so because, one, the valuation is actually kind of attractive still. It's 13 times forward earnings. It's not crazy expensive. Two is this company is still in a great position. So even without Jensen Huang's leadership, this company is still in the pole position in the AI race. I mean, their chips are in demand. You know, whoever they bring in to run this company is still going to be in a really good spot. You know, does AMD take some market share? You know, NVIDIA looking at 85% market share. Because can AMD come and take a bite out of that? I think so. But are they going to replace NVIDIA in the number one position? I don't think so. So I think still as an investor. You've got to pull through this. I mean, you're very positive on this. But, you know, there are allegations involving Chinese intelligence, potential threats to national security. I mean, how much greater does the financial risk become if Washington starts questioning whether NVIDIA can be trusted? Well, and that opens a whole can of worms there, too. Like, how far does that go? I mean, having, you know, and Trump obviously defending. You know, Jensen Huang publicly here, even after the allegations have been made here, and obviously, you know, he's resigned here now, I think works in Jensen Huang and NVIDIA's favor here. So it looks like the president of the United States is still going to defend NVIDIA and Jensen Huang, which is important. So those risks somewhat are minimized, but we do have a changing of power coming here too. So with the Dems coming in in January, does that narrative change? Maybe it does, you know, so there's obviously, you know, when you're talking national security, and it is, let's just call it what it is, it's China versus the US in this AI race here, right? Yeah, you know, so it is very important that, you know, obviously, China doesn't get a leg up. And if, you know, Jensen Huang was talking about, you know, US intelligence, you know, foreign intelligence targeting, and anything you want to call it, it is an issue here. So we don't know what extent that was the Chinese spy, what extent that Beijing got information on us. And on the U.S. But, I mean, it's a risk. I think that risk is not the top risk in NVIDIA right now. Like, the top risk for NVIDIA and all AI companies here right now is where is AI going? Is it a bubble? You know, was it a bubble? There's so much pull forward. We saw a stock run from $20 a share to $240 a share in the course of four or five years. So it's a matter of the bubble kind of has burst. Does it reinflate? Can we get the AI story going again? Does AI continue to change the world? I think that narrative is still in place, but there's definitely new risks with this whole Jensen Huang saga. Final question for you. We have seen, we know that NVIDIA still makes the chips that the AI industry desperately needs, as you were saying. So has Wall Street just handed investors an extraordinary buying opportunity? Or let me look at you, Cristobal, it's the worst yet to come. And again, this is what a lot of people are saying this morning. You have a lot of analysts defending the stock, some analysts downgrading it as well. So there is some fear out there, but I still think they're in a very good position going forward here. Hopefully, this too shall pass. I mean, it depends on who the replacement is going to be. I mean, the market has been very forgiving this morning because it looked like when it was in free fall this morning, I'm like, oh my gosh, stock goes 151 down to $148. It's rebounded to 164. So that vote of confidence from investors is coming in. They're saying, look, this is still a fantastic company. And even if it's not being run by Jensen Huang, it's still in the best position to benefit from the AI movement that we have coming. So I think as an investor, you do hold through it. But I mean, the story is constantly changing here. So if we start getting investigations, Democrats come and start investigating NVIDIA further, do you look to competitors? Is AMD in a better position today than they were yesterday? Absolutely. And the stock is showing that with AMD trading up, I think, 40 points the last time I looked at it here, up 30 points now. Broadcom's another competitor that's benefiting from this. It's up 5.5% here this morning. So the competitors definitely benefit here. And that market share is is up for grabs. You know, NVIDIA has a big chunk of it. So if they get a little piece, just a little piece, that's really good for AMD or Broadcom. Yeah, the lessons to be learned here from an extramarital affairs one or two. We don't know how many in total. Dennis Dick, as always, Dennis, good to have you on the show. We appreciate your time tonight. Thank you. Thank you so much for having me.