Jensen Huang’s private life became a serious problem for Nvidia investors. Huang resigned as chief executive on Thursday after being linked to two extramarital affairs; one involving a woman suspected of spying for China and another with a Nvidia executive who reported to him.
Since nearing a $6 trillion (€5.4 trillion) valuation in October, Nvidia has lost a third of its value, surrendering its position as the world’s most valuable company to Apple.
The speed of the sell-off – from 52-week highs to 52-week lows – is striking. Nvidia did suffer a larger drawdown during April 2025’s tariff turmoil, but that was a marketwide rout. This time, it has conspicuously underperformed its peers.
Nvidia was already in retreat before the affairs came to light, caught up in a broader sell-off in AI-related stocks. Indeed, over the past two years it has underperformed the average S&P 500 stock.
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Still, the sell-off raises questions about Nvidia’s dependence on Huang, who has run the company since co-founding it in 1993. He reportedly had 60 direct reports, an unusually flat structure he saw as a competitive advantage, but the flip side was a business heavily reliant on its chief executive.
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High-profile technology bull Dan Ives reckons Nvidia is worth 25 to 30 per cent less without Huang – a remarkable illustration of key-man risk.
Key-man risk is hardly unique to Nvidia. Tesla and SpaceX investors must contend with a similar dependence on Elon Musk, but it is an uncomfortable position for shareholders in a company as valuable as Nvidia.
Bulls might argue the sell-off went too far, with the stock trading on just 10 times estimated profits – a 15-year low, and much cheaper than the S&P 500 (18).
Nevertheless, shareholders might look enviously at Apple, which has moved from Steve Jobs to Tim Cook and now John Ternus without leaving investors wondering who comes next.
Nvidia’s predicament illustrates the downside of the superstar chief executive model, particularly when so much of a company’s value rests on one person.
