Global AI stocks sink as Nvidia CEO's exit deepens sector selloff
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
Nov 12 : Global AI-linked stocks fell on Thursday after Nvidia CEO Jensen Huang resigned following a deepening scandal around his affairs, upending the chipmaker's leadership and posing fresh risks to a sector already reeling with funding and regulatory concerns.
Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, the company said.
As the centerpiece of the AI ecosystem, the chipmaker finances infrastructure built around its chips - a strategy that has drawn scrutiny over circular funding and now risks weighing on the sector as its crisis deepens.
AI stocks have struggled after the Democrats swept the midterm elections, including in states opposed to new data centers, stoking fears that tighter regulation could slow the AI infrastructure build-out.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
Nvidia's shares slid 10.3 per cent in premarket trading and put its market value on course to drop below $4 trillion for the first time since July 2025 amid reports that the board was deciding whether to oust Huang.
Nvidia-backed neocloud firms CoreWeave dropped 13.6 per cent after surging more than 27 per cent in the previous session when its earnings ignited a relief rally in AI stocks.
Other neocloud stocks including IREN and Applied Digital were also trading lower. Nebius dropped 20 per cent after the company said its 2026 revenue would come in at the low end of its previous forecast.
Nvidia has lost about $300 billion in market value since the board announced an investigation on Sunday into Huang's relationship with a businesswoman called Alice Huang, who is alleged to be a Chinese spy.
"He's the face of Nvidia and Nvidia has been front and center of the AI build-out," said Jun Bei Liu, lead portfolio manager at Ten Cap.
"And if we look at how many new cloud data center businesses have been sponsored in this circular financing world, it's pretty much all by Nvidia. And so it has quite a meaningful ramification for what is to come."
Memory chipmaker Micron Technology fell 5.8 per cent and data storage firms Sandisk and Western Digital eased 8.5 per cent and 5.2 per cent. Photonic product makers Lumentum and Coherent and AI server maker Dell eased around 7 per cent each.
Chip-related companies Marvell Technology, Intel, Arm Holdings and Texas Instruments dipped between 4.5 per cent and 6.3 per cent.
Shares of AMD and Broadcom, which also produce AI chips and compete with Nvidia, however, rose 2 per cent and 1.4 per cent, respectively, on expectations that the turmoil at Nvidia could create opportunity for rivals.
Tech-heavy stock markets across the globe witnessed jitters. Japan and South Korea closed nearly 0.7 per cent lower. Tech stocks in Europe were also down about 1 per cent.
Nvidia short sellers have made about $3.8 billion in paper profits as of last close, and with the share price falling to $163, those gains can swell to about $6.8 billion, according to data analytics firm ORTEX.
Nvidia trades at about 12 times its 12-month forward earnings estimates, its lowest since November 2012, according to data compiled by LSEG.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app