Nvidia shares fell 2 percent on Friday and recorded a sixth straight week of declines, the longest streak since October 2012, after chief executive Jensen Huang resigned on Thursday. The stock closed at 162.85 dollars, its lowest of the past year, for a weekly loss of 10 percent, and the selling spread across the whole chip sector.
Why it matters
The Philadelphia Semiconductor Index fell 3.7 percent on Friday, with Advanced Micro Devices down 8.75 percent and Broadcom off 4.76 percent among the biggest drags. The S and P 500 technology index shed 1.7 percent and was the worst performing of the 11 major S and P sectors. The message from the market is that the Nvidia shock is now a sector shock.
The wider market held up better. The S and P 500 lost 30.73 points, or 0.4 percent, to 7,561.67, and the Nasdaq Composite lost 229.82 points, or 0.9 percent, to 25,136.27, while the Dow Jones Industrial Average rose 50.46 points, or 0.1 percent, to 52,347.55. For the week, the S and P rose 2.5 percent, the Nasdaq gained 2.26 percent and the Dow added 2.07 percent, ending four straight weeks of declines.
What happens next
Two tests await next week to gauge the AI trade. Nvidia reports quarterly earnings on Tuesday, the 17th, its first results without Huang at the helm, and Anthropic is expected to list on the 19th. Both will show whether investors still believe in the AI boom or whether the leadership crisis has broken the spell.
For now, the stock is waiting on the board. Chief financial officer Colette Kress is interim chief executive, Harvey C. Jones has become the board first chair, and an outside search firm is hunting for a permanent successor. Until that search ends, every Nvidia headline will move the stock, and the sector with it.
The stock slide also rewrote the wealth of the AI boom in a single week. Nvidia lost more than half a trillion dollars of market value since the board opened its investigation, and the shares are now trading at their lowest in a year. The fall matters beyond shareholders, because pension funds, index funds and retirement accounts all hold the stock, and the chip sector has become a pillar of the wider market. The question for investors is whether the company without Huang is still the company they bought, or whether the premium the market paid was a premium on one man.
