News that the chipmaker’s chief executive, Jensen Huang, resigned drove Nvidia’s stock down, though the broader market rose slightly.
Nvidia’s shares plummeted Thursday, sending tremors through global markets, as the company’s chief executive, Jensen Huang, stepped down from his role.
Shares in Nvidia dropped as much as 14 percent when markets opened for trading on Thursday, extending a decline that has wiped out more than $1 trillion from the company’s market value this month alone. The stock began to reverse most of its losses by late morning.
The broader market rose slightly, too, as investors began to conclude that the fallout of Mr. Jensen’s departure would not fundamentally undermine the artificial intelligence trade. Yields on the 10-year U.S. Treasury rose above 5 percent on Thursday for the first time in weeks. Yields go up when Treasury prices go down.
Nvidia has emerged as central to the A.I. economy because its chips — or graphic processing units — help train and power models across the industry. It has also become a central bank of sorts for several A.I. companies, because its finances are deeply intertwined with those of everyone from frontier A.I. labs to neoclouds, which rent out computing power.
“This is an Nvidia problem before it is an A.I. problem,” said Mark Malek, chief investment officer at Siebert Financial. But he added that Nvidia’s woes could trickle through to other companies.
“Where I would be careful is with the smaller A.I. cloud companies that leaned on Nvidia’s checkbook,” he said. “If the new regime gets more conservative about financing its own customers, that is where it shows up first.”
