Global AI stocks sink as Nvidia exit deepens sector fears
Global AI-linked stocks tumbled on Thursday as Nvidia CEO Jensen Huang's resignation deepened worries that the chipmaker, the AI boom's biggest financier, may pull back its funding of the sector.
AI stocks slide
Global AI-linked stocks tumbled on Thursday as Nvidia chief executive 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, according to Reuters.
Nvidia's shares fell 7.8% in premarket trading and put its market value on course to drop below $4 trillion for the first time since July 2025. Nvidia-backed neocloud firm CoreWeave dropped 6% after surging more than 27% in the previous session, when its earnings ignited a relief rally in AI stocks. AI stocks have struggled since the Democrats swept the midterm elections, stoking fears tighter regulation could slow the AI build-out.
The 'Bank of AI' question
As the centerpiece of the AI ecosystem, Nvidia 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. Investors fear that if Nvidia, under a different leader, backs away from financing data centers, the AI boom itself loses momentum.
The worry is not only about one company. Nvidia sits at the center of a web of investments in cloud providers, suppliers and AI labs, so a pullback by the chipmaker would reach across the whole trade. The board named chief financial officer Colette Kress interim chief executive while it searches for a permanent successor, Reuters reported.
- Nvidia premarket fall7.8%
- Market value lost since SundayAbout $300 billion
- CoreWeaveDown 6% after surging 27%
- Short sellers' paper profitsAbout $3.8 billion, up to about $6.8 billion
- Forward earnings multipleAbout 12x, lowest since November 2012
A $300 billion wipeout
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.
Nvidia short sellers have made about $3.8 billion in paper profits as of the 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. The stock now trades at about 12 times its 12-month forward earnings estimates, its lowest since November 2012, according to data compiled by LSEG. Bernstein halved its valuation of Nvidia, cutting it to $200 from $400, according to CNBC.
What comes next
Nvidia confirmed it will still publish its third-quarter results on Tuesday, November 17, as scheduled, the next hard test of the business without its founder at the helm, according to CNBC. The results land days after the board's decision, with investors watching whether demand for AI chips holds up while leadership questions hang over the stock.
For the wider market, the question is whether the AI trade can hold together without the company that has financed so much of it. The answer starts to arrive on November 17, when Nvidia reports third-quarter results under its interim chief.
