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Bloomberg Television9 min

Huang Ousted By Nvidia Board As CEO | Closing Bell

Huang, Romaine Bostick, Jess Menton, Carol Massar, Tim Stenovec

Earnings Call, Press Conference
  • Wall Street concluded a volatile session with major indices lower, led by a 1.7% drop in the Russell 2000, while the Dow, S&P 500, and Nasdaq fell by roughly one fraction of a percent.
  • NVIDIA shares declined 4.4% intraday, recovering from earlier lows of over 14%, though the broader AI trade remained resilient with sector peers gaining ground.
  • Investors are reallocating toward competitors AMD (up 5.8%) and Broadcom (up 5.5%), anticipating potential market share gains as NVIDIA navigates internal leadership uncertainty.
  • Founders 100 ETF, previously holding NVIDIA as its third-largest position at over 6%, faces a mandatory 90-day divestiture window regardless of current pricing.
  • Focused on succession, NVIDIA's CFO has been elevated to interim CEO while the board searches for a permanent replacement, raising concerns about the loss of Jensen Huang's unique industry relationships and supply chain management expertise.
  • Bloomberg Intelligence's Robert Schiffman predicts a significant financial penalty, specifically a large check or fine payable to the U.S. government, as a potential conclusion to the ongoing scrutiny.
  • Applied Materials reported Q4 earnings that beat estimates, with adjusted gross margins reaching 50.6% against a 48.1% prior-year figure and EPS of $4.16 versus a $4.06 street expectation.
  • Despite beating on key metrics, Applied Materials shares reacted tepidly in after-hours trading, gaining only 1.6% as investors weighed strong cash flow ($2.6 billion) against supply chain concerns.
  • Applied Materials projected multi-year revenue and profit growth driven by strong incremental demand for semiconductors related to AI computing roadmaps.
  • Cerebrus reported a third-quarter loss of $0.67 per share on $231 million revenue but issued a Q4 core hardware revenue forecast of $310–$330 million, significantly exceeding the $271 million consensus.
  • Cerebrus also raised its gross margin outlook for the quarter to 47–49%, surpassing the street estimate of 42%.
  • Cisco Systems issued fiscal year adjusted EPS guidance of $5.47–$5.53 and revenue guidance of $74.8–$75.8 billion, both upgrades from previous estimates.
  • Cisco CEO Chuck Robbins characterized the current market environment as the "very early stages of a multi-year networking super cycle" driven by AI infrastructure demand.
  • Cisco shares surged 4.6% in after-hours trading following the report, with an implied overnight move of up to 9% anticipated.
  • Brent Crude prices exceeded $96 per barrel, rising more than 3% and driving energy sector gains of over 1.5%.
  • Anthropic's anticipated IPO is reported to be six times oversubscribed, signaling robust institutional demand for AI infrastructure beyond the chip sector.
  • Retail traders were observed buying the dip in semiconductor stocks, with NVIDIA's forward P/E ratio currently hovering around 11 times.
  • The market remains divided on whether NVIDIA's fundamental value and product demand can sustain independently of Jensen Huang's leadership.
  • Potential congressional testimony and bipartisan scrutiny regarding NVIDIA's operations are expected to unfold following recent revelations.