Nvidia shares fall 5% as CEO Jensen Huang ousted; S&P 500 edges up
Nvidia Corp shares fell 5% after chief executive officer Jensen Huang was ousted, pushing the AI chipmaker's market value below US$4 trillion. The board is searching for a permanent replacement and has named chief financial officer Colette Kress as interim CEO.
The selloff did not drag the wider market down. The S&P 500 edged higher, with about half of its sectors rising, including chipmakers Advanced Micro Devices Inc and Broadcom Inc. The Nasdaq 100 rose 0.1% and the Dow Jones Industrial Average added 0.2% by 11am in New York.
"In the near term, investors should expect significant volatility in Nvidia," said Ken Mahoney of Mahoney Asset Management. "Longer term, we believe this could ultimately present an opportunity for investors with the appropriate time horizon." He added that Nvidia remains vitally important, with tremendous earnings power and a central role in the AI revolution.
Chinese AI stocks fell on concerns that cloud operators' access to advanced chips may face tighter US scrutiny amid the controversy surrounding Nvidia. Nebius Group NV sank after the AI computing provider reported a disappointing sales outlook. Strategy Inc fell after MSCI Inc dropped the Bitcoin accumulator from its global equity benchmarks, potentially triggering billions of dollars in stock sales.
Bitcoin fell 3.8% to US$71,542.99 and Ether dropped 3.1% to US$2,004.57. The yield on 10-year Treasuries advanced seven basis points to 5.07%. West Texas Intermediate crude rose 0.2% to US$86.66 a barrel, while spot gold fell 3% to US$3,868.68 an ounce.
What it means for Pakistan: Pakistani investors with exposure to US tech stocks or crypto assets will feel the immediate impact: Nvidia's slump and the drop in bitcoin and ether can hit portfolio values and the rupee cost of overseas investments. The episode also underscores the concentration risk in AI-linked holdings that some Pakistani funds and wealthy investors have increasingly favoured. Any broader risk-off move in global markets could weigh on remittance-linked sentiment and the import bill through higher oil prices, though the source gives no Pakistan-specific figures.
