AI focus
Summary of article:
- Main point one:Analysts warned that if Huang was replaced, Huida’s share price could fall 25% to 30%.
- Point 2:The market is worried that Huida AI’s leadership position and pricing power will be damaged after Huang Renxun’s departure.
- Key point three:It is broadly estimated that if the market share declines, HUIDA’s gross profit and market value may be significantly reduced in 2030.
Huida (Nvidia) board of directors reportedly considering CEOJen-Hsun Huang Whether he stays or goes, investors began to calculate what the impact would be on Huida’s share price if he were fired. Some analysts estimate that if Huang Jen-hsun steps down, Huida’s market value could decline by nearly a third.
Dan Ives, a well-known technology analyst and analyst at the investment firm Yorkville Ives, who has always been bullish, said that if Huang Renxun leaves, Huida’s share price may fall by 25% to 30%, which means that the share price may fall to about $122 per share.
This means that it will decline by about 30% from the closing price of about US$173 per share on the 11th.
Ives wrote in a research report: “We believe that if Huang Jensen is removed, the value of HUDA as a company and its stock will decline by 25% to 30%. This will not only change the company’s future development direction, but also completely change the competitive environment in the US and global AI GPU markets, especially the Chinese market.”
He pointed out that Huida faces so-called “key person risk”, which means that a large part of the company’s value is closely linked to Huang Renxun’s popularity, image and personal influence. “Huida is Huida’s DNA. The company’s AI achievements and ambitions are highly dependent on his continued work as CEO. Huang Renxun is irreplaceable.”
Yegor Tolmachev, a senior equity analyst at Freedom Broker, estimated that Huida’s share price could fall by 10% to 30%. “The decline in the share price will depend on many factors, especially whether Huang’s successor can have enough influence and how severe sanctions the company faces.”
Financial Times investment commentator columnist John Foley pointed out that CEO dismissals are actually quite common. He was one of seven CEOs to resign from Russell 3000 index companies last year. Both McDonald’s and Intel have experienced cases in the past where CEOs were fired for having extramarital affairs with employees. After the news was announced, share prices of both companies fell by less than 3%.
However, for companies led by star CEOs, the stakes are much higher. For example, in 2018, the US Securities and Exchange Commission accused electric vehicle giant Tesla (Tesla) of misleading shareholders and demanded that Musk be removed as CEO and chairman. At that time, Tesla’s stock price fell 15%.
Additionally, in 2023, OpenAI CEO and co-founder Altman was removed from his position because he “failed to always be forthright” with the board of directors. Although OpenAI is not listed on the market, the news wiped off about $50 billion in the market value of Microsoft, which owns some of its shares.
HUIDA is also led by a CEO with star aura. Foley said that before the scandal broke, Huida’s market cap was up to $4.5 trillion. Even without Jen-Hsun Huang as CEO, the company still has customer demand that will accumulate in the years to come. But without this pragmatic leader, Huida may lose some of its key market share and strong pricing power, which is reflected in the company’s gross profit margins.
