Nvidia CEO’s exit reverberates through AI trade | ABC NEWS
The resignation of Nvidia chief executive, Jensen Huang sent shares in the chip maker down as much as 14 per cent, before closing down 4.3 per cent at $US166 per share. The broader market on Wall Street was less affected. Jensen Huang has now been summoned to testify before a senate committee after his affair with a suspected Chinese spy raised national security concerns.
Floodlines Research founder Anna Wu said in the near term the AI trade sentiment looks shaky, but the long-term thesis looks intact.
Anna Wu says investors need to watch for the company’s quarterly earnings next week, as well as Mr Huang’s upcoming testimony to see how this story plays out. “The Nvidia earnings, where investors will pay attention to its cash coverage, whether or not it’s still making receivables turn into cash as fast as it did, its debt levels, its investment commitments, as well as margins. Those are all hot metrics to track.”
Anna Wu says “if the testimony yields something that’s out of expectation of the market especially on the tariff and the trade deal perspective, that could put more pressure on the broader stock market.”
Anna Wu doesn’t believe the exit of Jensen Huang will be the straw that breaks the camels back when it comes to the AI trade, because she says you never see a black swan coming.
She also discusses the reputation risk for Microsoft after its outage and the outlook for Anthropic’s IPO.
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