History Offers Warnings on an Ousted Founder at Nvidia

Nvidia’s board is said to be readying the departure of Jensen Huang, the only chief executive the chipmaker has had in 33 years. According to Yahoo Finance, the stock fell 7.80% in overnight trading on Thursday as the market contemplated that scenario.

A 20% decline is predicted by some analysts if his departure lacks a named successor. The bigger danger, historical examples indicate, comes further down the line.

Does the Market Forgive a CEO Firing? Nvidia Puts the Idea to the Test

The closest parallels are Intel and McDonald’s. In both cases, the chief executives departed because of consensual relationships with employees, a violation of corporate rules.

On the day of Brian Krzanich’s resignation, Intel shares dropped 2.4% on June 21, 2018. McDonald’s declined 2.7% on November 4, 2019, the first trading day following the dismissal of Steve Easterbrook.

Over the subsequent year, the two stocks took different paths. Intel dropped 11.7% as the S&P 500 rose 6.8%. The shares of McDonald’s gained 9.6%, outpacing the benchmark’s 7.9% increase.

A clear distinction lay in their succession planning. Intel installed its finance chief as interim leader while a search got underway. McDonald’s elevated its US president, Chris Kempczinski, and included the news in the same disclosure.

JUST IN: NVIDIA IS REPORTEDLY LOOKING FOR JENSEN HUANG’S REPLACEMENT. The $NVDA board is reportedly considering removing Huang over alleged extramarital affairs, including one involving a suspected Chinese spy.

— BeInCrypto (@beincrypto) November 12, 2026

A Named Heir Softens the Blow, Yet Wynn Reveals the Ceiling

Two more corporate departures test the value of a swift transition.

HP slid 8% in the trading session following Mark Hurd’s resignation under pressure in August 2010. The board took roughly two months to pick a successor, who was then dismissed within a year. Twelve months after Hurd’s departure, HP was trading 29.5% lower, while the index gained 6.9%.

Wynn Resorts acted more quickly. In February 2018, founder Steve Wynn stepped down after misconduct claims, with president Matt Maddox assuming the role at once. The shares had declined 18.6% during the uncertainty, then bounced up 8.6% upon his departure.

Despite the immediate relief, Wynn shares finished the year 19.5% below their level before the scandal, with the S&P 500 ahead by 1.4%.

A Chair That No One Has Been Prepared to Occupy

When it comes to succession, Nvidia mirrors the less reassuring examples. Huang lacks a clear heir apparent. Semafor noted that certain board members prefer finance chief Colette Kress as a temporary CEO.

Gene Munster of Deepwater told CNBC that a company still led by its founder, with a vague second-in-command, faces a potential 20% decline. Seaport Research’s Jay Goldberg described such a fall as merely the immediate disruption.

Jensen Huang’s performance history introduces a second concern. A 2021 paper by Paul Farah and Hui Li looked at 187 instances where an S&P 1500 company forced out its chief executive. In cases where the departing CEO had outperformed the market, the stock generated negative abnormal returns over the following three years. Huang matches that description, given that Nvidia has risen roughly 267% in three years.

A portion of the hit to Nvidia’s share price may already be accounted for. With the overnight descent to $160.18 factored in, NVDA is trading around 14% beneath its November 6 closing price.

That November 6 session was the last one before the board disclosed its inquiry. The controversy arrived in the middle of a broader market retreat, pushing appraisals of AI-chip stocks to their lowest point since 2011.

Might Jensen Huang Unload His Stake in Nvidia?

Another hazard that has emerged during previous forced departures is the founder divesting his own holdings. Steve Wynn offloaded his entire 11.8% interest for $2.1 billion within seven weeks of stepping down, Reuters reported. That scenario seems less probable at Nvidia.

Based on CNBC’s reporting, Huang holds roughly 3.6% of Nvidia. Around 800 million of these shares are in trusts shared with his wife. CNBC’s Robert Frank described that arrangement as a stabilising element for investors.

“Jensen Huang directly holds only about 70 million shares, worth about $12 billion … The bottom line, Jensen Huang has very limited economic control over Nvidia, with just 3.6% ownership and even less control since those shares are held in trust with his wife,” he said.

This historical record has its constraints, as four examples constitute a limited dataset and none approached Nvidia’s market value. Each company dealt with additional strains over those years. If a successor is identified before the November 17 earnings release, the similarity to the Intel and HP situations would diminish.