Nvidia Without Jensen Huang: What the Sell-Off Does and Doesn't Tell Us

Why one company is carrying the selloff

The boardroom ouster of Nvidia (NVDA) co-founder and CEO Jensen Huang has forced Wall Street to work out what the dominant AI chipmaker is worth without the executive who built it. Abrupt leadership exits usually trigger knee-jerk selling, but that first jolt doesn't automatically signal trouble for NVDA, let alone for the wider AI industry.

Here's the thing: the numbers point to a company-specific reaction. NVDA stock sits more than 30% below the all-time high it reached in October. The S&P 500, by comparison, is only about 2.5% off its own record.

That gap matters. The index is weighted heavily toward mega-cap tech, roughly 40%, so a real slowdown in corporate AI spending would show up as a steep drawdown across the benchmark. A routine 2.5% pullback suggests investors are reacting to one name rather than abandoning the whole theme. Mark Malek, chief investment officer at Siebert Financial, puts it plainly: "As for the broader AI trade, this is an NVIDIA problem before it is an AI problem. The biggest buyers are funding this buildout out of their own cash flow, and they need the chips no matter whose name is on the door."

The board's response has also drawn a measured reaction. It elevated Chief Financial Officer Colette Kress and appointed Nvidia's first board chair. Malek says directors "did the sensible thing and reached for a steward," adding that Kress "knows every number in that order book," while naming a chair "fills a hole that should have been filled years ago."

What disappears along with the premium

Leadership upheaval will hang over NVDA shares for a while. Even with capable executives in charge, this tech stock is likely to lose the premium valuation multiple it earned during Huang's multidecade run. Markets tend to attach a discount to a company when the person most associated with its strategy steps away, and that discount can linger until the successor builds a track record.

Hendi Susanto, portfolio manager of the Gabelli Global Mini Mites Fund (GAMNX), frames the question this way: "The real question is how big a discount investors will put on Nvidia without Jensen."

A lower multiple is not the same as weaker fundamentals, and Susanto argues that distinction is getting lost. The ecosystem Huang spent decades building, including CUDA, the software layer, networking and established partners and suppliers, "doesn't disappear with him." Rapid innovation is embedded in Nvidia's engineering ranks, and a two-year product schedule is already in place. Customers, in his reading, have little reason to cancel orders. "The fundamentals have not changed overnight," he writes. "Using our value-investing discipline, we find the stock attractive at these levels." That's one fund manager's view, not a forecast, and it's worth weighing alongside the risks.

The demand signals still on the table

Supply constraints may be working in Nvidia's favor right now. Matt Bryson at Wedbush, who rates NVDA at Outperform (the equivalent of Buy), notes that material supply is largely contracted through 2027 or 2028. Rising rental rates for graphics processing units (GPUs) suggest processing demand still outpaces supply. Those are two data points that don't depend on who sits in the corner office.

With the next-generation Rubin Vera architecture nearing deployment, Bryson writes that "however NVDA's executive saga plays out, the company should have a prolonged period of solid financial results to find its footing." That's a useful reminder that near-term earnings and long-term leadership questions often move on different clocks.

Volatility has always been part of the ride

Nvidia's run has never been smooth. Anyone who put $1,000 into Nvidia stock 20 years ago had to sit through periodic drawdowns of 50% or more, including a 66% decline during the 2021 to 2022 bear market. The gains that followed were large, but they came with stretches that tested patience.

Ken Mahoney, president and CEO of Mahoney Asset Management, expects choppy trading ahead. "In the near term, investors should expect significant volatility in Nvidia," he writes. "Longer term, we believe this could ultimately present an opportunity for investors with the appropriate time horizon. Nvidia remains a vitally important company with tremendous earnings power and a central role in the AI revolution."

What to watch next

Without Huang, Nvidia loses a high-profile CEO, and stocks rarely keep peak multiples through leadership transitions. Succession uncertainty and a compressed price-to-earnings (P/E) ratio are likely to persist until a permanent CEO earns credibility with investors.

That said, hyperscalers are still buying GPUs about as fast as foundries can produce them, and profits tend to matter more than any single executive. As the saying goes, "the graveyards are full of indispensable men."

For anyone following the story, three things are worth tracking: whether the order book and supply commitments hold up, how quickly the new leadership builds credibility, and where the valuation settles once the transition news fades. Those signals will tell you more about Nvidia's next chapter than the first week of headlines.