'Do Not Fire Jensen Huang,' Kobeissi Letter Says, Warning Ousting CEO Could Be a 'Costly Mistake' and a 'Net Negative for Nvidia'
The Kobeissi Letter has urged Nvidia Corp. (NASDAQ: NVDA) to retain CEO Jensen Huang, arguing that removing the company’s co-founder could hurt shareholders and become a “costly mistake.”
In a post on X on Thursday, the market commentator called on Nvidia’s board to avoid a decision made “in the heat of the moment” and consult shareholders before taking action.
“Do not fire Jensen Huang,” said the market commentator, adding that “his departure would ultimately be a net negative for Nvidia, its shareholders, and the AI Revolution.”
Kobeissi Urges Nvidia To Keep Huang
The Kobeissi Letter said Nvidia has no clear replacement for Huang and cited a study of 187 forced CEO departures at S&P 1500 companies that found negative long-term stock returns when outperforming CEOs were removed.
It urged a thorough investigation, shareholder consultation, and an advisory vote. The post claimed shares had fallen 35% in 26 trading days, nearly half because of the scandal, and estimated a possible exit was 80% priced in. It argued that retaining Huang offered limited downside and tremendous upside, compared his situation with Amazon.com Inc (NASDAQ: AMZN) keeping Jeff Bezos after his 2019 affair, followed by a 108% stock gain by 2021, and called Huang irreplaceable to Nvidia and the AI revolution. It also said personal misconduct should be distinguished from corporate wrongdoing.
Nvidia Board Faces Leadership Questions
The board has reportedly been considering Huang’s removal amid allegations involving two extramarital relationships: one with Alice Huang, reported to be a suspected Chinese spy, and another with Nvidia Vice President Kimberly Powell. Nvidia has hired a law firm to conduct an independent investigation into the allegations. The company also maintained that there was "no reason to believe" its trade secrets or national security had been compromised.
Analysts Highlight Huang’s Strategic Value
Analyst Ming-Chi Kuo offered a similar argument, saying Huang’s biggest strength is his ability to turn technologies identified by engineers into products that the entire company commits resources to developing and delivering. Kuo said Huang considers technology, organizational capabilities, business strategy and supply-chain requirements together before making major decisions. He added that investors should watch whether Nvidia can maintain its product-development efficiency and how competitors respond if Huang leaves.
The potential consequences could extend beyond Nvidia, according to Dan Ives, a partner at Yorkville Ives. In a podcast with Anthony Pompliano, Ives called Huang the “central nervous system” of the U.S. technology ecosystem, arguing that the company has no clear succession plan. Ives estimated a roughly 15% chance of Huang leaving within 12 months and warned that an immediate departure could send stocks down 25% to 30%.
Meanwhile, Scott Colangelo, chairman and managing partner of Prime Capital Financial, focused on Nvidia’s underlying business and its appeal to investors. On Wednesday, he told Fox Business’ “Varney & Co.” that the company’s products perform exceptionally and that its fundamentals remain strong. Colangelo said 95% of analysts rated Nvidia shares Buy or Strong Buy, with an average price target of $320 to $330, describing the stock as a “no-brainer” buying opportunity on the dip.
Nvidia shares rose 2.92% to close at $173.73 during Wednesday’s regular trading session. The stock fell 6.84% to $161.85 in premarket trading on Thursday. Shares were down 6.85% year to date.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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