Nvidia Faces Longest Weekly Losing Streak Since 2012 Amid Leadership Crisis

Nvidia shares are on the verge of posting their sixth consecutive weekly decline, marking the longest losing streak for the semiconductor giant since 2012. This sustained sell-off has erased approximately 29% of the company's value over the past few months, resulting in a market capitalization reduction of roughly $1.6 trillion as of the close on Thursday. The stock's trajectory has shifted from being the world's most valuable company for most of the year to falling below Apple in total market worth.

The acceleration of the decline coincided with the abrupt resignation of co-founder and long-time CEO Jensen Huang. Huang, who had led Nvidia for 33 years, stepped down on Thursday following the public revelation of two separate extramarital affairs. One relationship was reportedly with an alleged Chinese spy, while the other was with a company employee who served as the vice president of health care. The board of directors has appointed finance chief Colette Kress as the interim CEO while a search for a permanent successor begins.

News of the first affair broke over the weekend, prompting Huang to send a letter to employees in which he apologized for being "unfaithful to my wife." The situation intensified late Wednesday after The New York Times reported on the second affair. By early Thursday morning, Huang had formally resigned, concluding a dramatic exit for a leader who had become one of President Donald Trump's prominent allies in the corporate sector.

On Thursday, Nvidia stock dropped 4.3%, extending the weekly loss to 11%. This latest decline follows a rough week the previous month, when shares fell about 9% in the lead-up to the midterm elections. Investors had grown concerned that sweeping Democratic victories and the passage of various ballot measures could slow the pace of artificial intelligence infrastructure development. Additionally, rising interest rates had weighed on the broader AI trade, impacting debt-heavy customers such as neocloud providers.

Market analysts are assessing the impact of the leadership change on Nvidia's future performance. Gil Luria, an analyst at D.A. Davidson, noted in a report that the company faces a challenging transition period. He lowered his price target from $300 to $200 but maintained a buy rating, stating that the market has appropriately adjusted for the upcoming changes. Luria emphasized that the departure of Huang creates uncertainty over the next few months.

Other financial experts suggest that near-term concerns may overshadow fundamental business results. Analysts at Oppenheimer wrote that while they anticipate solid earnings, the departure of Huang could create a lingering negative sentiment among shareholders. They expect these factors to take precedence over the company's operational metrics in the immediate future.

The pressure now shifts to interim CEO Colette Kress, who must guide the company through a critical period. Nvidia is scheduled to report its quarterly results on Tuesday. According to LSEG, analysts are projecting 91% year-over-year revenue growth, bringing total revenue to $108.9 billion. This figure represents an eighteen-fold increase compared to the same quarter in 2022, just before the launch of ChatGPT sparked the current generative AI boom.

Despite the strong projected growth, the stock remains under pressure from both leadership uncertainty and broader market conditions. Investors are closely watching how Kress manages the transition and whether the company can maintain its momentum in the AI sector while navigating the challenges posed by the recent executive turmoil.