TLDR
- AMD and Broadcom rose in Thursday premarket trading after reports that Nvidia’s board may oust CEO Jensen Huang.
- Nvidia shares fell more than 6% in premarket trading.
- William Blair upgraded AMD to Outperform, citing Nvidia’s leadership issues and Intel’s supply challenges.
- AMD had gained 23% and Broadcom 18% this week through Wednesday’s close.
- A Pepperstone analyst said investors see this as a problem for Nvidia, not for AI.
Shares of AMD and Broadcom rose in Thursday premarket trading after reports that Nvidia’s board is preparing to remove CEO Jensen Huang. Nvidia shares fell more than 6% in the same period.
The Wall Street Journal reported that the board met as soon as Wednesday evening to decide Huang’s fate. The report cited people familiar with the matter.
A source told Reuters the meeting took place that night, but no official outcome or board statement had been confirmed. Nvidia did not respond to a request for comment from Barron’s early Thursday.
What the Reports Say
Huang told staff in a letter on Sunday that he had been unfaithful to his wife. He apologized for breaking the trust of his family and employees.
According to Investing.com, the affair involved an executive at Megaspeed, a Singapore-based data company and major Nvidia customer. The Wall Street Journal also reported a second affair, citing a person familiar with the matter.
That second report involves Kimberly Powell, who runs Nvidia’s healthcare business. The New York Times first reported it.
Huang is a central figure in the global chip industry. He meets regularly with top U.S. and Chinese officials and is often greeted by fans in Taiwan, where he was born.
Nvidia is a major supplier of chips used in artificial intelligence. Reports on its leadership have drawn attention across the AI sector.
How Shares Moved
By 5:57 a.m. ET, AMD was up 3.6% and Broadcom was up 2.5% in premarket trading. Nvidia was down more than 6%. The moves point to investors betting that turmoil at Nvidia could help its closest competitors.
Later in premarket trading, Nvidia was near $160.91, down 7.38% from Wednesday’s close of $173.73. The news took a dent out of Wednesday’s tech rally, Barron’s reported.
AMD and Broadcom were two exceptions among tech names. Barron’s said they were up 3.5% and 2% ahead of the open.
Both stocks were already having a strong week. AMD had risen 23% and Broadcom 18% through Wednesday’s close.
Barron’s said the moves may suggest Huang’s possible exit would not necessarily crush the AI boom. The reports have been hitting AI stocks more broadly, it said.
William Blair analyst Sebastien Naji upgraded AMD to Outperform on Thursday. He cited Nvidia’s leadership issues and Intel’s supply challenges as reasons AMD can keep gaining share.
Naji expects AMD to deliver “best-in-class growth,” Barron’s reported. William Blair analysts also said Nvidia faces more scrutiny and a possible leadership vacuum. They described a growing leadership and regulatory imbroglio at Nvidia.
They said competition from custom ASIC chips remains a risk to AMD’s Instinct line. They also see a chance for AMD to benefit from custom programs.
AMD’s graphics chip plans compete directly with Nvidia’s data center accelerators. Cloud providers have looked more at AMD’s custom designs as an alternative to Nvidia’s standard GPUs.
Pepperstone analyst Chris Weston said the market appears to separate a problem for Nvidia from a problem for AI. He said price action suggests investors see the turmoil mainly as a risk specific to Nvidia, calling it “an important distinction for the broader technology trade.”
