Jensen Resigns at NVDA , Still Swimming With Sharks Out There

The tape opened Thursday with a headline nobody had on their bingo card: Jensen Huang is out at Nvidia. Before the bell, the company said Huang resigned as president, CEO, and director, effective immediately. CFO Colette Kress steps in as interim CEO while keeping the CFO job, and longtime director Harvey Jones becomes the board’s first chair. The release gave no reason. The backstory isn’t exactly subtle, though. On November 8, the board opened an independent investigation “in light of recent reporting” about Huang. Then, on Wednesday evening, a report about his personal life came, followed minutes later by a Wall Street Journal story that the board was preparing to remove him. The 8-K says the board accepted the resignation on the 11th.

NVDA had bounced almost 3% on Wednesday, then gave all of that back and more after hours. It opened down 13% and bottomed at $148.80 a minute later, roughly 14% lower. Then dip buyers did what dip buyers do. The stock clawed back to close at $166.05, down 4.34%. That’s still about 31% below the October 6 record. If you’re wondering whether the market cares more about the CEO or the chips, an 8-point intraday reversal tells you something. The real test is Tuesday, when Nvidia reports Q3 with an interim CEO and a lot of questions on the call.

The indexes had a similar shape. Futures were ugly early, and by midday the DIA was up more than 130 points with the $SPY and $QQQ slightly green. The rally didn’t hold. The S&P 500 closed down 0.35% at 7,592, the Nasdaq slipped 0.39% to 25,366, and the Dow lost 189 points to 52,297. Small caps took the real beating, with $IWM down 1.6%. That fits the bigger picture. Core CPI came in hot again on Tuesday; the 10-year is sitting right around 5%, and fed funds futures are pricing a December hike as close to a sure thing. Small caps don’t love that. Neither does housing. October existing-home sales fell 5.5% to an annual pace of 3.75 million, the lowest since August 2010, with mortgage rates near their highest since 2000.

Inside the AI trade, the leadership rotated instead of collapsing. AMD and AVGO were both up around 5% in the afternoon as money moved to other semis. The neocloud names got hit. CRWV fell about 7% the day after its 25% post-earnings rip. NBIS dropped about 16% after pushing its $7 billion annual revenue run-rate target from December to February, even with revenue up 571%.

The consumer looked shaky. YETI fell about 9% after cutting guidance and pointing to a cautious consumer. KPLT dropped about 24% for a similar reason. GPN closed down 12%. CTVA lost nearly 19% on a weak Brazil market with high dealer inventories and cash-strapped farmers, plus news that it’s being removed from the MSCI USA Index. $MSTR is also being removed, effective November 30, and fell about 4%.

Next up: CSCO and AMAT reported after the bell tonight, and nothing really major on either. October PPI comes out at 8:30 a.m. With the Fed already leaning toward a hike, another hot number would raise the stakes for the market. Then the main event is Nvidia on Tuesday. Expect plenty of people to say they called it. SOXX is about flat in aftermarket after the CSCO and AMAT reports.

Have a great night; see you in the Discord in the morning.