Nvidia’s shares continued to slide on Thursday, sending tremors through global markets, as the company’s board considered the future of the chip-maker’s chief executive, Jensen Huang.
Shares in Nvidia dropped more than 7 percent in premarket trading, extending a drop that is set to wipe roughly $1 trillion from the company’s market value this month alone.
With the leadership of Nvidia in turmoil, investors faced uncertainty about the sustainability of the artificial intelligence trade and how the problems inside one of the technology industry’s most important companies could affect the broader economy.
The fallout could be seen in markets around the world, although the effects appeared limited. Major market indexes in Asia, where many of Nvidia’s partners and rivals in the artificial intelligence industry are based, mostly declined. Taiwan’s TSMC, which produces chips designed by Nvidia, fell more than 2 percent. But South Korea’s Samsung, which competes with Nvidia on some business lines, gained 1 percent.
European stock indexes, which have less heavy exposure to A.I., mostly rose on Thursday. But shares in the region’s largest tech company, ASML of the Netherlands, fell more than 2 percent.
In the United States, futures for the tech-heavy Nasdaq slipped less than 1 percent in premarket trading. The stocks of Nvidia’s fellow tech giants, members of an exclusive club known as the “Magnificent Seven,” were little changed.
Shares in some of Nvidia’s U.S. chip-making rivals were set to climb: AMD rose more than 2 percent and Broadcom gained nearly 2 percent in premarket trading on Thursday. The broader S&P 500 was set to open slightly lower.
Trading outside of official market hours is often choppy, which can exaggerate moves in stock prices.
Mr. Huang, who co-founded Nvidia in 1993, has become one of the most influential forces in the A.I. boom, which has helped to drive U.S. stock markets to new highs in recent years.
Nvidia’s board deliberations came after revelations that Mr. Huang had an affair with an executive who reports to him as well as with a woman whom U.S. intelligence has identified as a Chinese spy.
Some market analysts covering Nvidia have begun to downgrade their forecasts for the company’s stock. Though the chipmaker is expected to remain a critical part of the A.I. build-out, some noted rising concerns about the company’s governance and lack of a clear succession plan. They argued that these revelations have fundamentally changed Mr. Huang’s position in the tech world and its unclear what the implications of a change in his role at Nvidia could be.
Analysts at Bernstein downgraded Nvidia and sharply lowered their target for its share price. “Our gut tells us that we probably haven’t yet fully probed the depths of what might be found here,” they wrote. “We’ve had enough, and prefer to watch from the sidelines.”
Analysts at RBC Capital Markets also slashed their forecast for the stock, citing the lack of formal succession plan for the chief executive position. “Whether any individual can replicate Huang’s singular combination of technical vision, ecosystem-building acumen, and ability to serve as the global face of the A.I. revolution remains an open question,” they noted.
Other analysts, including those at Wells Fargo and Mizuho, maintained their bullish views on Nvidia, but said it was increasingly likely that Mr. Huang may not be chief executive for much longer.
Nvidia’s stock is down about a third from its peak at the start of October, putting the company deep in a bear market, defined as a drop of 20 percent or more from a recent high.
Nvidia became the world’s largest public company, by market value, for the first time in 2024, exerting an outsize influence over major indexes like the Nasdaq Composite and S&P 500. Analysts still expect Nvidia to make a profit of well over $200 billion this year, with its chips in high demand as tech companies rush to build giant A.I. data centers.
During last week’s market turmoil, Nvidia fell below Apple as the world’s biggest public company.
