Swissquote: Pricing the Huang risk

13 november 2026

Nvidia fell as much as 14% before paring its losses to end the session down around 4.3%, as dip buyers stepped in, trying to figure out what comes next for Nvidia without Jensen Huang, and for the broader AI industry without the man in the leather jacket.

Let’s start with Colette Kress, the new interim CEO. She has been the company’s CFO since 2013. She knows the business, its customers and its finances, and helped oversee Nvidia’s extraordinary expansion. She said the company would continue advancing the work that has made NVIDIA a leader in accelerated computing and AI, and execute on the opportunities ahead.

No one knows exactly how Nvidia will manage the complex web of investments and business relationships built under Jensen Huang. But the base case is that Kress’s immediate task will be to reassure investors that Nvidia can stay on the trajectory Huang set and deliver without him at the helm.

And yes, a company of Nvidia’s scale — worth around $4 trillion — had better be able to function without one person, no matter how brilliant that person is. To me, this is an opportunity for Nvidia to shift the focus from a one-man show to the company and its products.

In the near term, there are risks that need to be priced correctly, meaning we could see further downside as more news emerges. On Thursday, Reuters reported that Huang had a relationship with a second Nvidia employee, bringing the total number of reported affairs to three.

With Huang’s departure, further revelations about personal relationships may have less impact on the share price, although any governance implications would still matter. The allegations involving external business relationships could have far-reaching consequences for the company and the broader AI complex.

Entities linked to Alice Huang, a former Megaspeed executive, are reportedly under investigation over suspected efforts to smuggle Supermicro hardware containing Nvidia chips into China. The Information reported that at least $7.5bn worth of Nvidia chips had been linked to her network since 2023. However, the scale of any illegal diversion and the potential impact on Nvidia’s earnings remain unclear. That figure should not be read as an equivalent amount of Nvidia revenue or profit at risk.

On the core business front, my base case is that Nvidia’s near-term sales and earnings remain resilient, although export restrictions, investigations and any disruption to customer relationships could affect the outlook. The Huang scandal does not change the fact that Nvidia offers leading chips and a powerful software ecosystem, which customers need in the middle of an AI boom.

Huang’s departure will rock the boat, of course. But my assumption is that Nvidia’s hardware and software advantages could provide a competitive cushion over the next two to three years. That is a judgement rather than a fixed technological lead: execution, talent retention and competitors’ progress will determine how long it lasts.

Inside chips, AMD was among the beneficiaries of the turmoil, while Google, Amazon and Microsoft also gained as investors considered the potential opportunity for alternatives to Nvidia. But a broad shift away from Nvidia will not happen overnight. AMD can offer better price/performance for certain workloads, while Nvidia retains advantages in others and benefits from its established software ecosystem.

Google, Amazon and Microsoft’s homegrown chips are designed primarily for their own platforms and workloads. They can replace Nvidia chips for some uses, but are not universally interchangeable with its platform.

These advantages give Nvidia time to rebuild confidence, retain and recruit talent, and defend its competitive position. For Chinese chipmakers, tighter restrictions on access to US products could create an opportunity to gain ground.

On the investment front, Nvidia has an extensive web of investments in its customers — often described as circular financing — and the fear is that this machine could receive less fuel following Huang’s departure. A more cautious investment approach could slow growth for some customers and, in turn, weigh on Nvidia’s future sales and the broader AI expansion.

The share-price decline suggests investors are already allowing for significant risks. From last Friday’s close of $186.64 to this week’s low of $148.80, Nvidia lost around 20% of its value — nearly $1 trillion in market capitalisation. Though, the size of the decline alone does not tell us how much of the potential damage is priced in.

Also, there are also broader risks to AI expansion than Huang’s departure: democratic control of Congress from January could bring greater scrutiny of the AI buildout, while investors have been weighing its costs and returns for months. Huang’s departure adds another layer of uncertainty to an already challenging backdrop.

The market is treating Jensen Huang as a man who will be very difficult to replace, and he will be. If nothing else, he has exceptionally close ties to customers, suppliers and senior government officials. But Nvidia, as a company, could eventually emerge stronger from the separation if it demonstrates that its success extends beyond its founder.

On the earnings front, the good news is that results will go ahead next week, on Tuesday, 17 November. The company is expected to report Q3 revenue of around $109 billion, up approximately 91% from a year earlier, and adjusted earnings per share of $2.47, an increase of roughly 90%.

Expectations are high, and high expectations are harder to beat. Investors will also look for clarity on sales through intermediaries, exposure to tighter export controls and whether any affected orders could be replaced by demand elsewhere. There will be plenty of speculation and scrutiny next week, so buckle up.

One encouraging point is that lower valuations could make investors more willing to return. At $165 per share, Nvidia trades at around 21 times trailing earnings and 10.4 times expected earnings for fiscal 2028, ending January 2028. On those estimates, the valuation looks attractive, although that assessment depends heavily on Nvidia delivering the expected earnings growth.

Continued strong growth remains my base case. The longer-term impact of Huang’s departure will be priced gradually. Eventually, the numbers will do the talking.

Zooming out, rotation was the name of the game yesterday, as investors shifted from technology towards other pockets of the market. But the rebound in oil prices is tempering appetite. This morning, futures are in the red. It will be interesting to see whether the upcoming Anthropic IPO can reclaim the headlines as investors begin to digest Huang’s departure.

The US will also release its latest PPI figures today, with a slower monthly increase expected. Tuesday’s stronger-than-expected CPI print fuelled speculation about a possible 50bp Fed hike in December, although a 25bp increase remains the base case. Another set of strong inflation figures could increase the probability of a larger hike, push Treasury yields and the US dollar higher, and jinx the rotation trade.