Nvidia’s shares experienced another decline on Thursday, as the significant controversy and alleged espionage scandal forced veteran CEO Jensen Huang to resign, leaving investors to wonder about the company’s prospects without his leadership.
Following Huang’s exit from the roles of CEO and board member, the AI chip manufacturer’s stock plummeted by 14 percent at the market’s opening, but it later rebounded slightly to finish the day down by 4.3 percent.
The overall market largely avoided severe repercussions from Nvidia’s troubles, with major indices recording only slight declines by the end of the trading session.
Michael Dehal, a senior portfolio manager at Dehal Investment Partners, suggested that the swift appointment of CFO Colette Kress as interim CEO likely mitigated further losses for Nvidia’s stock.
“The prompt resolution on a temporary basis provided some reassurance to investors,” Dehal stated.
Nevertheless, this represents a substantial decline for a corporation that achieved a $5 trillion US valuation just a year prior, having lost over $500 billion US in value following allegations involving Huang and a purported Chinese spy, and more than $1 trillion US since its peak in October. Huang has acknowledged an extramarital affair, but has not confirmed whether it was with Alice Huang, the individual U.S. intelligence claims is associated with Beijing. Reports, including one from the New York Times, allege that he also engaged in an affair with a vice president who reports directly to him.
Nvidia, the U.S.-based tech giant, was rocked by allegations that president and CEO Jensen Huang had two extramarital affairs, including one with an alleged Chinese spy. Following his resignation, CFO Colette Kress has stepped in as interim CEO of the world’s dominant chipmaker and AI powerhouse.
CORRECTION (Nov. 12, 2026): This video erroneously shows an image of the Dow Jones Industrial index instead of Nasdaq.
This news has caused concern among industry observers, prompting them to reassess Nvidia’s value without its seemingly irreplaceable leader and co-founder.
Financial experts and money managers note that such significant fluctuations can affect investments and retirement savings for many Canadians.
As one of the world’s most valuable companies, Nvidia plays a substantial role in major stock indices, where larger market capitalizations are weighted more heavily.
Due to its size, the Santa Clara, California-based firm comprises roughly six percent of the S&P 500 and about nine percent of the tech-oriented Nasdaq.
Dehal points out that many Canadians invest in index funds through exchange-traded funds (ETFs) that track these major indices, which means they might be susceptible to significant fluctuations in Nvidia’s stock value. Mutual funds may also concentrate on technology but could offer more diversity as they are actively managed by professionals.
A screen on the floor of the New York Stock Exchange displays news about Nvidia’s stock price in New York, on Monday. (Yuki Iwamura/Associated Press)
In recent years, tech companies have increasingly dominated these indices, with the AI surge elevating the value of firms like Apple, Microsoft, and Alphabet, Google’s parent company. According to certified financial planner Zainab Williams, tech companies now represent an estimated 40 percent of the S&P 500, indicating that investors holding basic ETFs may be vulnerable to significant fluctuations in tech stocks, especially in AI.
“Investors often have numerous ETFs and believe they are well diversified,” Williams explained. “However, if those ETFs contain many of the same companies, you may be exposing yourself to similar volatility.”
Portfolio manager Michael Dehal says Huang’s quick exit from Nvidia was ‘reassuring to investors.’ (Submitted by Michael Dehal)
Some analysts in the industry fear the Nvidia scandal could have wider implications for the tech market due to the company’s crucial role in AI development.
With an estimated 80 percent market share in chips that support technologies ranging from AI data centers to ChatGPT and drones, Nvidia is a key player in the sector. The company has also invested heavily in funding various AI startups, including Anthropic, Toronto’s Cohere, and the cloud computing firm CoreWeave.
Since Huang was a pivotal figure behind these investments, Dehal notes that the future of Nvidia’s funding for other tech firms remains uncertain, which could pose a short-term challenge for other AI companies.
Despite this, he and other investors believe the tech sector will not suffer a significant downturn. In fact, companies like Broadcom and AMD, which produce their own chips, saw gains on Thursday, offsetting some of the losses incurred by Nvidia, according to Jamie Murray, president of Murray Wealth Group.
“The capital is still available, and it will still be utilized. We don’t foresee this slowing down the industry significantly, just perhaps a rearrangement of priorities,” Murray said.
For those with a diversified investment portfolio, Dehal advises there is no need for panic — but it highlights the importance of not concentrating investments in a single area.
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Williams emphasizes that this situation could serve as a wake-up call for investors to examine their investments more closely, allowing them to assess potential exposure to specific industries or companies.
“If the events of the past week caused you significant concern, consider what actions you can take to mitigate that exposure and explore investments in different sectors or countries,” Williams advised.