The Huang premium disappears

Wall Street isn’t exactly known for getting sentimental. But Jensen Huang’s ouster today has analysts sounding less like stock pickers and more like they’re processing a breakup.

The Nvidia co-founder and CEO resigned today amid a scandal involving alleged affairs and national security concerns. CFO Colette Kress is taking over temporarily as the company searches for a successor. Nvidia shares plunged 4.34%, wiping out more than $600 billion in market value at its lowest point today, while the selloff spread to AI infrastructure companies including CoreWeave, Dell, and Super Micro Computer.

The shock left even Wall Street struggling for words. TD Cowen’s Joshua Buchalter called Huang’s departure “shocking, unprecedented, and sad,” as he removed Nvidia from the firm’s top picks. “Nothing prepares you for what has happened at Nvidia,” added longtime chip bull Ben Reitzes of Melius Research in his downgrade from Buy to Hold.

But the uncertainty extends beyond Nvidia’s stock. Huang helped finance the AI boom itself, and investors are questioning what happens without its biggest dealmaker.

Put up or pay up

Huang played something resembling AI’s central banker, using Nvidia’s financial resources to support companies building the infrastructure that buys its chips.

Call it the Nvidia put: Huang’s firm was a guaranteed buyer and financial backstop in much of the AI economy. Nvidia has committed billions through startup investments, computing-capacity purchases, and data center lending—allowing AI companies to secure financing, and generating more demand for Nvidia chips in the process.

Circular? Maybe. But they also kept the AI spending machine running. Without Huang driving those deals, a more cautious successor could scale back future commitments, raising borrowing costs for AI companies and slowing the money flow.

Burn the books

Today, the banks are divided. Bernstein downgraded Nvidia and halved its price target to $200, even while acknowledging that its underlying business remains strong. Oppenheimer also downgraded the stock, warning that Huang’s departure could trigger a talent exodus. Citi, meanwhile, maintained its Buy rating. Analysts may not be questioning the fate of Nvidia’s chips, but its growth without Huang.

That’s dragged down the AI companies he invested in, and left an opening for competitors like AMD and Broadcom. Nvidia’s chips are still essential, and existing financing contracts won’t simply disappear. But future deals could face tougher scrutiny, potentially raising the cost of building AI infrastructure.

One thing’s certain: Nvidia’s next CEO has some big shoes—and an even bigger checkbook—to fill.—HC