Nvidia Closes Down 4% After Retail Buyers Cut a 14% Plunge on Huang's Exit

Retail investors put a record $111 million into Nvidia during the first 30 minutes of trading, Reuters reported. That buying helped the shares cut their loss to about 5% within the session. Nvidia's market value hovered just under $4 trillion for most of the day and closed slightly above that level, according to CNBC.

The recovery matters because Nvidia is the largest single weight in the AI trade and the stock had already been under heavy pressure before Thursday. The company has lost more than $1 trillion in market value over five weeks, according to Reuters, and the shares closed nearly 11% below their November 6 level, according to StockTitan data. A bigger fall on the day of Huang's departure would have hit index funds and retirement accounts that hold the stock in large amounts.

The wider market fell only modestly. Funds tracking the S&P 500 and the Dow both ended about 0.35% lower, while a fund tracking smaller companies lost 1.64%, according to StockTitan. Investors moved money towards Nvidia's rivals: Advanced Micro Devices rose 5.86% and Broadcom 5.54%. CoreWeave, the cloud provider in which Nvidia is a large investor and supplier, fell 6.86%.

Wall Street analysts were more cautious than the dip buyers. Bernstein halved its price target on Nvidia to $200 from $400. Stacy Rasgon, a senior analyst at the firm, told CNBC that Huang's relationship with a direct report made it "much tougher for the board to leave him in position", and that "Jensen is Nvidia". Richard Reyle, chief investment officer at Questar Capital Partners, told CNBC that the lack of a succession plan "makes Nvidia uninvestable".

Bloomberg reported that Wall Street was not especially concerned about the risk that Huang's ouster poses to the broader AI trade, as investors kept betting on other companies tied to AI spending.

The board named chief financial officer Colette Kress interim chief executive and has started a search for a permanent successor. Kress has called a staff meeting for November 18, and the company reports quarterly results next week, which will be the first test of how customers and suppliers are reacting to the change at the top.