Nvidia Shares Extend Their Decline

Global artificial intelligence stocks fell on Thursday after Nvidia CEO Jensen Huang resigned, adding another source of uncertainty to a technology sector already facing funding, regulatory and valuation concerns.

Nvidia shares dropped 8.2% in early trading, reaching a more than 16-month low. The decline put the company’s market capitalization on track to fall below $4 trillion for the first time since July 2025.

Chief Financial Officer Colette Kress will serve as interim CEO while the company searches for a permanent successor.

The leadership change follows a widening controversy involving Huang and businesswoman Alice Huang, a controlling shareholder of Singapore-based cloud computing company Megaspeed. The company has also faced scrutiny over allegations that it helped Chinese customers obtain advanced Nvidia chips subject to US export restrictions.

Nvidia has lost more than $550 billion in market value since its board announced an investigation into Huang’s relationship on Sunday.

Nvidia’s Financing Role Raises Broader Concerns

Beyond its position as the leading supplier of AI processors, Nvidia has played an important financing role in the infrastructure ecosystem built around its technology.

Its investments and commercial relationships with AI infrastructure companies have raised questions about circular financing and the extent to which smaller businesses depend on Nvidia-backed capital.

The leadership crisis has therefore prompted investors to reassess whether disruption at Nvidia could affect funding availability across the sector.

CoreWeave shares fell 9.1%, reversing part of the previous session’s gain of more than 27%, which followed its earnings report. Other AI infrastructure companies, including IREN and Applied Digital, also traded lower.

Nebius dropped 16.2% after forecasting that its 2026 revenue would reach the lower end of its previous guidance.

Nvidia short sellers have generated approximately $9.6 billion in paper profits so far this week, according to market data.

Chipmakers and Technology Stocks Under Pressure

The Philadelphia Semiconductor Index declined 1.3%, reflecting broader weakness among companies supplying the AI infrastructure market.

Marvell Technology fell 3.8%, while Oracle declined 2.6%. Micron lost 2.5%, and storage companies Sandisk and Western Digital dropped 6% and 3.7%, respectively.

Photonic technology companies Lumentum and Coherent, alongside AI server manufacturer Dell, also recorded declines ranging from 3% to 5.1%.

Caterpillar and Vistra, which have exposure to data center construction and power generation, slipped approximately 0.5% each.

The weakness extended beyond US markets. Japan’s Nikkei and South Korea’s KOSPI closed nearly 0.7% lower, while European technology stocks declined approximately 1%.

AMD and Broadcom Gain as Investors Consider Alternatives

Not all AI-related companies moved lower. AMD advanced 3.7%, while Broadcom gained 5.6%, as investors considered whether Nvidia’s leadership uncertainty could create opportunities for competing chip suppliers.

Major cloud companies also traded higher. Alphabet, Amazon and Microsoft gained between 0.8% and 2.7%.

These gains suggest that investors are beginning to distinguish between companies directly exposed to Nvidia’s leadership and financing challenges and businesses that could potentially benefit from a shift in AI chip demand.

However, the broader sector remains vulnerable to regulatory concerns and questions about the sustainability of infrastructure spending.

What Investors Should Watch Next

Investors will be monitoring Nvidia’s search for a permanent CEO, the implications of its ongoing investigation and whether the company’s financial relationships with AI infrastructure providers remain intact.

The regulatory environment is another important consideration. Earlier market weakness followed concerns that political opposition to data center development could result in tighter restrictions and slow the expansion of AI infrastructure.

Nvidia’s valuation has also compressed significantly. The shares are trading at approximately 12 times forward earnings estimates, their lowest multiple since November 2012.

Whether that valuation attracts buyers will depend partly on the company’s ability to restore confidence in its leadership and maintain its central role in the AI ecosystem.