Nvidia's stock was under pressure well before the Jensen Huang scandal came to public attention.
Nvidia shares (NVDA) fell 12.7% this week, recording their their sixth straight weekly decline. That's the longest stretch of consecutive weekly losses for the stock since a six-week period that ended in October 2012, according to Dow Jones Market Data.
The sustained pressure on Nvidia reflects broader concerns about the sustainability of artificial-intelligence spending, particularly as it relates to the health of new-age cloud companies and the potential for a slower data-center buildout in a tougher political climate.
See also: Nvidia's stock selloff may be just beginning, even after shedding 30% from its peak
On top of that, the company must contend with the fallout from Huang's stunning resignation as CEO in the wake of reported extramarital affairs with an executive linked to an Nvidia customer, as well as with two Nvidia employees.
Nvidia didn't respond to a MarketWatch request for comment.
This week, the stock also demonstrated notable underperformance relative to the broader chip sector, with the PHLX Semiconductor Index SOX up 8.1% on the week. That means Nvidia lagged the chip index by 20.8 percentage points, the biggest such gap since 2008, according to Dow Jones Market Data.
Nvidia shed $573.34 billion in market capitalization this week, its largest weekly wipeout on record.
Another big test looms in the week ahead, as the company is scheduled to report earnings results for the October quarter on Tuesday. Colette Kress, who has been Nvidia's chief financial officer for more than a decade, has been tapped to serve as interim CEO while the company looks for a permanent chief executive.
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Heading into earnings, analysts are wondering whether Nvidia's management may swoop in to support the stock with heavy buybacks. The company had $235 billion in repurchase authorizations remaining as of late September.
Some questions go deeper than the information expected to be revealed on the call. At the top of investors' minds is who Nvidia's next permanent CEO will be.
Huang's departure leaves a hole, TD Cowen analysts led by Joshua Buchalter said in a note on Thursday. The company will need "clear technical and operational authority," in addition to Kress as its financial leader. "That could result in an atypical leadership structure," the TD Cowen analysts wrote.
The choice would dictate the company's direction going forward - and it could look like when Apple transitioned from the "visionary" Steve Jobs to the more operations-minded Tim Cook, the analysts noted.
The CEO transition could also impact Nvidia's relationships with customers and suppliers, most importantly its relationship with Taiwan Semiconductor Manufacturing (TSM), according to TD Cowen. Customer or supplier defections "would be clear signs that the situation is not stabilizing," they added.
Other questions going forward are what happens with Nvidia's investments in AI, and who would take Huang's mantle as AI's "most vocal advocate and evangelist." The analysts said it's unclear how much of the investments would have to be unwound.
The situation carries broad implications for the sector. And with Huang's reputation "tarnished," it's unclear who would fill that advocacy void, TD Cowen said.
There's also doubt about how Nvidia would retain key executives and employees in a "very tight" market for AI talent. "Key defections and retention decisions will move the stock," the TD Cowen analysts wrote.
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