On November 11, global markets focused on Nvidia's board of directors. Following reports of additional misconduct involving CEO Jensen Huang, news emerged that the board was discussing his potential dismissal and succession plans. Nvidia's stock dropped over 8% in after-hours trading and weekly trading sessions.
Nvidia's Stock Decline
Nvidia's stock closed at $173.73, up 2.87% on November 11. However, after the reports of Huang's misconduct and the board's discussions about his dismissal, the stock plummeted by 8.62% in after-hours trading. It continued to decline, closing at $160.59, down 7.58% in subsequent Nasdaq trading.
Wall Street is already adjusting Nvidia's target price downward. U.S. investment firm Baird cut its target price from $500 to $200, a 60% reduction. Analyst Tristan Gerra expressed concerns about the risks associated with government investigations into Huang, congressional reports, revenue risks related to China, and uncertainties stemming from a leadership vacuum. Morgan Stanley analyst Joseph Moore emphasized that Huang's leadership was crucial in determining Nvidia's strategic direction, raising concerns about short-term uncertainties.
More severe predictions have emerged. The Financial Times reported that if Huang is dismissed, Nvidia's GPU market share could drop to 50%, with projected gross revenue declining by $300 billion. If accurate, this could reduce Nvidia's market value by as much as 30%, amounting to approximately $1.4 trillion.
Volatility in Nvidia's Supply Chain
Domestic semiconductor companies closely linked to Nvidia's supply chain also experienced significant volatility. Analysts suggest that a leadership vacuum at Nvidia could alter the direction and pace of AI semiconductor investment cycles, potentially impacting companies like Samsung Electronics and SK Hynix, as well as KOSDAQ materials firms.
Since the initial report on Huang's alleged ties to Chinese intelligence on October 28, Samsung's stock has fallen by 15.10%, from 245,000 won to 208,000 won over 11 trading days. During the same period, SK Hynix's stock dropped from 1,508,000 won to 1,254,000 won, a decline of 16.84%. Samsung, which has a partnership with Nvidia for AI semiconductor packaging substrates, saw its stock fall from 1,315,000 won on October 28 to 886,000 won on November 12, a decrease of 32.82%.
Isu Petasys, which supplies Nvidia with essential high-density printed circuit boards for AI accelerators and servers, also saw its stock drop by 13.27% amid concerns over weakened AI infrastructure investments. Other companies, such as Daeduck Electronics (-32.25%) and Hanmi Semiconductor (-10.61%), experienced significant fluctuations. The average decline among these firms was 20.03%, surpassing the KOSPI average decline of 11.11% during the same period.
However, some analysts believe the long-term impact will be limited. Yang Ji-hwan, head of Daishin Securities, noted that aside from Samsung and SK Hynix, no other companies globally can supply HBM to Nvidia. He stated that while Huang played a leading role, U.S. AI semiconductor investments are unlikely to decrease amid ongoing U.S.-China tensions, and Nvidia will continue to produce chips. He added, “Just because Steve Jobs stepped down as Apple CEO doesn’t mean Apple’s stock collapsed. While there may be uncertainties regarding the CEO's management style and corporate philosophy in the short term, it won't fundamentally change the company's trajectory.”
* This article has been translated by AI.
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