Asian Stocks Waver as Nvidia Plunges

Global stocks wavered at the start of Asian trading on Thursday, while Nvidia shares plunged in after-hours trading following reports that the company's board was considering removing longtime Chief Executive Officer Jensen Huang.

Nvidia shares tumbled in after-hours trading following reports that the company's board was considering the future of CEO Jensen Huang. [Photo: NVIDIA Facebook]

Nvidia's board was reportedly meeting to discuss Huang's future as the world's leading artificial intelligence chipmaker faced mounting scrutiny over allegations involving the longtime executive, Gregor Stuart Hunter reported for Reuters.

The Wall Street Journal reported that the board was preparing to consider Huang's position following allegations of two extramarital affairs, including one involving a woman suspected of having links to Chinese intelligence.

The New York Times separately reported that Huang had an affair with a company executive who reported to him.

The reports raised questions about corporate governance and leadership succession at Nvidia, whose processors have become central to the global AI industry.

"It looks bad from every single angle," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

"I believe the board won't oust him until they have an all-star, a known entity in the tech sector, to replace him," he said. "At the end of the day, let's not forget that the Nvidia chip is the centerpiece of the AI story."

Nvidia shares fell more than 8% in extended trading, weighing on S&P 500 e-mini futures, which slipped 0.4%.

Regional markets were mixed after a choppy start. South Korea's Kospi rose 0.2%, Taiwan's stock market gained 0.5%, and Japan's Nikkei 225 advanced 0.5%.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1%, weighed down by losses in Hong Kong.

On Wall Street, US stocks advanced on Wednesday, with the S&P 500 rising 1.3% and nearly recovering all the losses recorded since the previous week's US midterm elections.

The uncertainty surrounding Huang's position nevertheless threatened to reverse some of the optimism surrounding AI-related stocks, as investors assessed the potential consequences of a leadership change at one of the industry's most influential companies.