2026-11-12

Nvidia Sinks 9% After Hours as WSJ Reports Board Is Preparing to Oust Jensen Huang - Then a Second Affair Allegation Lands

Written & reviewed by the TradeSmrt editorial team · 2026-11-12

In this article

What Happened
Why "Investigation" Turned Into "Removal Prep"
What to Take Away From This
FAQ
Sources

What Happened

Wednesday, November 11 started out as a good day for U.S. stocks. CoreWeave's (CRWV) third-quarter earnings, released the day before, showed revenue up 168% year over year, and the stock jumped more than 20% on the news, reviving investor confidence in the broader AI trade. The Nasdaq Composite closed up 1.60% (400.31 points) at 25,466.19, the S&P 500 gained 1.31% (98.45 points) to 7,619.38, and the Dow Jones Industrial Average rose 0.49% (254.60 points) to 52,486.49. Apple hit a fresh all-time high the same day, and on a weekly basis the S&P 500 was up 3.3% and the Nasdaq 3.6% - a session that looked, by any normal measure, like a relief rally finally taking hold.

Then, hours after the closing bell, the mood flipped completely. The Wall Street Journal reported that Nvidia's board is preparing to oust CEO Jensen Huang, with the board potentially meeting as soon as Wednesday night to decide his fate. Shortly after that report broke, the New York Times added a second bombshell: beyond the extramarital relationship Huang had already admitted to - with a woman U.S. intelligence officials suspect may have been recruited by Chinese intelligence - he had also been involved in a separate relationship with another Nvidia executive, according to people familiar with the matter. Reporting noted that rumors of this second relationship had circulated internally for years, according to a former employee. The timing matters: just three days earlier, on Sunday, November 8, Nvidia's board had announced a committee of independent directors working with outside counsel to investigate whether Huang had been targeted by a foreign intelligence operation. Wednesday's reporting suggested the board was now weighing a leadership change independent of whatever that investigation ultimately concludes.

Markets reacted immediately. Nvidia shares, which had closed the regular session around $173, slid to roughly $159-$161 in after-hours trading - a drop reported variously as 7.6% to more than 9%, depending on the outlet and the exact moment measured. CNBC put the decline at more than 9%; CBS News and Yahoo Finance cited a drop of more than 8% to $159.51; Investing.com reported a 7.6% fall to $160.50. The numbers differ slightly, but the direction and scale were unmistakable. At the same time, Nasdaq 100 futures fell 1.1% and S&P 500 futures fell 0.5%, effectively unwinding a meaningful chunk of the very rally that had lifted the broader market just hours before. Earlier in the week, Wall Street had already started pricing in leadership-related uncertainty: Baird downgraded Nvidia to Neutral, citing leadership uncertainty, export controls, and questions about the durability of AI spending, while Morgan Stanley kept its Overweight rating and $300 price target but dropped the stock from its Top Pick list. As of this writing, Nvidia's board has not issued any formal statement confirming a decision on Huang's future.

Why "Investigation" Turned Into "Removal Prep"

Understanding this story requires separating two distinct stages. The first stage was the independent investigation announced November 8 - a fact-finding process aimed at determining whether the woman Huang was involved with actually had ties to a foreign intelligence service, and whether that relationship compromised company secrets or violated governance policy. The second stage is what leaked on Wednesday: regardless of what that investigation ultimately finds, the board is reportedly weighing a leadership change based on what's already known - namely, that this wasn't a single lapse but a pattern involving at least two relationships, with the resulting erosion of trust and reputational exposure. In other words, the center of gravity shifted from "was he targeted by a spy?" to "can he still command the board's and investors' confidence?" Corporate governance experts typically treat these as separate tracks - one legal and security-related, the other purely about trust and reputation - and the reputational track tends to move faster and more harshly.

The legal mechanics behind the board's leverage are worth spelling out. Under the standard bylaw structure of most U.S. public companies, a board can remove a CEO with a simple majority vote; no criminal conviction or proven legal violation is required. Removing someone as a director of the company, however, is a separate matter that requires shareholder approval. That split creates several possible outcomes beyond a clean "he's out": Huang could step down as CEO while remaining on the board, shift into a different role such as founder and board chair during a transition, or be placed on leave while the investigation runs its course.

Part of why markets reacted so violently also comes down to Nvidia's own corporate structure. Huang has run the company since co-founding it in 1993 - more than three decades at the helm - and his personal presence has become almost synonymous with the broader AI industry narrative on Wall Street. The company has never publicly named a successor, a gap analysts have flagged for years as a structural weakness. This kind of key-person risk tends to sit quietly in the background until a leadership crisis forces the market to price it all at once. History offers comparable cases: when Uber's board pushed founder Travis Kalanick out in 2017, and when Boeing fired CEO Dennis Muilenburg over the 737 MAX crisis in 2019, the underlying business fundamentals hadn't changed overnight in either case - yet the stocks moved sharply purely on uncertainty about who would be running the company next. Nvidia's market capitalization dwarfs either of those companies, so the same category of risk translates into a far larger dollar swing.

The after-hours session itself amplified the move. Trading volume and liquidity are thin outside regular hours, so the same size of sell order can push prices further than it would during the trading day - which helps explain why reported declines ranged from 7.6% to more than 9% depending on the source and the moment captured. That means Wednesday's after-hours drop shouldn't automatically be read as a preview of where the stock opens the next regular session; thin-liquidity moves often overstate the market's true price discovery. Layered on top of all this is the timing: Nvidia's third-quarter earnings are due November 17, just days away. Large-cap stocks typically see elevated volatility heading into an earnings print under normal circumstances; add a potential leadership vacuum, and the earnings call risks becoming more about governance questions than about the numbers themselves.

What to Take Away From This

The first lesson is that "an investigation was announced" and "the board is preparing to remove the CEO" are fundamentally different stages of risk, and the market prices them very differently. As a story escalates from fact-finding to active decision-making, the range of priced-in uncertainty tends to widen along with it.

The second lesson is that key-person risk grows in direct proportion to succession-planning gaps. Companies built around a singular, symbolic founder-leader tend to see outsized stock reactions whenever that leader's position becomes uncertain. It's worth periodically asking of any company you hold: what happens to this business if its most visible leader were gone tomorrow?

The third lesson is that after-hours percentage moves can diverge meaningfully from the next regular session. Thin liquidity tends to exaggerate price swings, so reacting purely to an after-hours headline number is riskier than waiting to see actual price and volume once the regular session opens.

The fourth lesson is that governance crises landing right before a major earnings date compound volatility. When two sources of uncertainty - a scheduled catalyst and an unscheduled leadership crisis - collide, the market often ends up pricing both simultaneously, producing larger swings than either would generate alone.

FAQ

Has Nvidia's board actually removed Jensen Huang?

As of this writing, no. Nvidia's board has not issued a formal statement confirming any decision on Huang's future. The WSJ report describes the board as "preparing" to consider removing him - an ongoing deliberation, not a finalized outcome. This is a fast-moving story, so checking for the latest coverage before drawing conclusions is advisable.

Can a board legally remove a CEO without a criminal conviction?

Yes. Under typical U.S. corporate bylaws, a board can remove a chief executive with a simple majority vote, and no criminal conviction or formally established legal violation is required. Removing that person as a board director, however, is a separate step that requires shareholder approval, which is why the eventual outcome could involve several different configurations rather than a single clean exit.

Who would run Nvidia if Huang were to step down?

The company has not publicly named a successor - a gap Wall Street analysts have pointed to for years as a structural vulnerability. If a leadership change does occur, an interim arrangement or a transition involving an existing senior executive would likely be floated as options, but as of this writing no specific succession plan has been confirmed.

Could this affect Nvidia's November 17 earnings report?

This governance story doesn't directly change Nvidia's actual chip demand or revenue trajectory. That said, analysts on the earnings call are almost certain to press on leadership risk and the investigation's status, which could add short-term share-price volatility independent of the underlying financial results.

Sources

This article is an independent synthesis and analysis based on the reporting below, not a reproduction of the original coverage. Please check the original sources directly for the latest figures and developments.

This article is for informational purposes only and is not investment advice. Market conditions change constantly, so please verify the latest data before making any investment decisions.