Jensen Huang Resigns as Nvidia Chief Executive, Shares Drop as Much as 14% and Finance Chief Colette Kress Steps In

Jensen Huang, Nvidia's co-founder, resigned on Thursday as president, chief executive and a member of the board, effective immediately, the company announced. The board named Colette Kress, the chief financial officer, as interim chief executive. Kress joined Nvidia in 2013, and she will keep the finance role until the board names a permanent successor. Harvey C. Jones, a former chief executive of Synopsys, became the board's first chair. The board said its search for a permanent chief executive will consider internal and external candidates. Nvidia's regulatory filing gives no reason for the resignation.

The shares fell as much as 14% in the first minutes of trading. The previous regular-session close was $173.73. Forbes reported that the opening drop briefly took Nvidia's market value below Microsoft's $3.9 trillion. The stock then recovered part of the loss and traded about 5% lower by 11 a.m. Bernstein analyst Stacy Rasgon downgraded the stock to market perform and cut his price target to $200 from $400. "With the new allegations, it feels impossible to us for the board to keep him in the role," Rasgon wrote. Citigroup lowered its target to $225 from $285, and Oppenheimer withdrew its target, citing uncertainty. On Wednesday evening the stock had already fallen about 8% in extended trading, and that decline pulled Nasdaq-100 futures lower. The Financial Times put the late decline at almost 9%. Seoul Economic Daily quoted a price of $159.31, down 8.3%.

Huang admitted to an affair in a message to employees. The Israeli business daily Globes reported (in Hebrew) that he had two relationships outside his marriage. According to Globes, the first was with a woman whom the US government reportedly regards as a Chinese intelligence agent. The New York Times reported that the second was with a vice-president who reports directly to him. Nvidia has not confirmed either account. On November 8 the board had said it had confidence in Huang. The Japan Times reported that Nvidia had hired an outside firm to identify chief executive candidates, and that the company had no succession plan for a founder whose public identity is closely tied to the company.

Kress takes charge five days before Nvidia reports third-quarter results on November 17. The resignation followed a strong session for chip stocks. On Wednesday the S&P 500 rose 1.31% to 7,619.38 after CoreWeave's results revived buying in artificial-intelligence stocks, and every member of the Philadelphia semiconductor index closed higher. Interest-rate conditions were already tightening. October consumer prices rose 0.4%, and the core measure rose 0.3% for a third straight month. Dallas Federal Reserve President Lorie Logan said she sees a case for two more quarter-point increases. The 10-year Treasury yield last closed at 4.98%.

The case also has a national-security side. US officials suspect that Chinese intelligence targeted Huang, and that suspicion has renewed congressional pressure on the administration to reverse its approval of H200 chip sales to China. The pressure comes as President Trump prepares to visit Chinese President Xi Jinping.