TLDR
- AMD and Broadcom rose in Thursday premarket trading while Nvidia fell more than 6%.
- The Wall Street Journal reported that Nvidia’s board is preparing to oust CEO Jensen Huang.
- William Blair upgraded AMD to Outperform on Thursday.
- AMD gained 23% and Broadcom 18% this week through Wednesday’s close.
- A Pepperstone analyst said investors see this as a risk specific to Nvidia.
Shares of AMD and Broadcom rose in Thursday premarket trading. Nvidia fell more than 6% at the same time.
The split followed reports that Nvidia’s board is preparing to remove CEO Jensen Huang. The Wall Street Journal cited people familiar with the matter.
The Journal said the board met as soon as Wednesday evening to decide Huang’s fate. A source told Reuters the meeting took place that night.
No official outcome or board statement had been confirmed. Nvidia did not respond to a Barron’s request for comment early Thursday.
What Is Behind the Reports
Huang told staff in a letter on Sunday that he had been unfaithful to his wife. He apologized for breaking the trust of his family and employees.
Investing.com said the affair involved an executive at Megaspeed, a Singapore-based data company. Megaspeed is a major Nvidia customer.
The Wall Street Journal also reported a second affair, with Kimberly Powell, who runs Nvidia’s healthcare business. The New York Times reported it first.
Huang is a central figure in the chip industry. He meets regularly with top U.S. and Chinese officials and is often greeted by fans in Taiwan, where he was born.
How Chip Stocks Split
Nvidia closed Wednesday at $173.73. In later premarket trading it was near $160.91, down 7.38%.
By 5:57 a.m. ET, AMD was up 3.6% and Broadcom was up 2.5%. Investors appeared to bet that turmoil at Nvidia could help its closest rivals.
The reports took a dent out of Wednesday’s tech rally, Barron’s said. AMD and Broadcom were two exceptions, trading up 3.5% and 2% ahead of the open.
Both stocks were already having a strong week. Through Wednesday’s close, AMD had risen 23% and Broadcom had climbed 18%.
William Blair analyst Sebastien Naji upgraded AMD to Outperform on Thursday. He cited Nvidia’s leadership issues and Intel’s supply challenges.
Naji said those factors could help AMD keep gaining share and deliver “best-in-class growth.” William Blair also said it sees room for AMD shares to rise as the company stays focused on execution.
AMD’s graphics chips compete directly with Nvidia’s data center accelerators. Cloud providers have looked more at AMD’s custom designs as an alternative to Nvidia’s standard chips.
William Blair said competition from custom ASIC chips remains a risk to AMD’s Instinct line. The firm said Nvidia faces a possible leadership vacuum and growing regulatory scrutiny.
Pepperstone analyst Chris Weston said the market appears to separate a problem for Nvidia from a problem for AI. He called it “an important distinction for the broader technology trade.”
Weston said price action suggests investors see the turmoil as a risk specific to Nvidia. Barron’s said the moves may show that a Huang exit would not necessarily crush the AI boom.
