Gene Munster Says This is Nvidia’s Biggest ‘Long-Term Challenge’ After Replacing Jensen Huang

Gene Munster is among the many investors in NVIDIA Corp (NASDAQ:NVDA) who see struggles ahead after longtime CEO Jensen Huang resigned. Here’s what Munster says is the biggest challenge for the company.

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Nvidia’s Biggest Challenge

In the wake of a scandal involving Huang, Nvidia’s stock has fallen significantly this week. While some investors are heading for the exits, Munster is still long Nvidia and sees opportunity ahead.

"Nvidia’s biggest long-term challenge is maintaining urgency. That’s easier said than done," Munster tweeted.

Munster, in a blog post, says that Huang "was a force of optimism," helping to push the AI trade forward with confidence

"His impact on the company was equally impactful, taking revenue from $27B in CY22 to what will be about $415B in CY26. That breakthrough growth was driven at the core by a well-traveled playbook for tech success."

The tech investor said "urgency is central" to a tech company’s growth and outsized returns for investors.

"When I think back to the magical tech investments over the past 45 years, the one I come back to share a central characteristic: a founder with urgency central to their DNA."

For example, Munster names Larry Page and Sergey Brin for Google, Mark Zuckerberg for Meta Platforms, Alex Karp for Palantir and Elon Musk for Tesla and SpaceX:

• Page and Brin: having "other bets," acquiring YouTube, pushing mobile opportunities
• Zuckerberg: acquired Instagram and WhatsApp, moved Facebook beyond university students, pushed into AI early with bet on the metaverse and Superintelligence Labs
• Karp: went hard after government customers
• Musk: slept on factory floor to save Tesla, works side-by-side with product development team at SpaceX

"These founders have an innate sense of urgency, a constant wartime mentality when it comes to beating the competition."

The comments from Munster come as Nvidia is searching for a permanent replacement for Huang, with internal and external candidates being considered. Chief Financial Officer Colette Kress has been named interim CEO.

"As a shareholder in Nvidia, I believe NVDA is undervalued. I also believe we are much earlier in the AI buildout than most think, and it will deliver upside to Street estimates over the next couple of years."

Munster’s Concern for Nvidia

While laying out the long-term challenge for Nvidia, Munster remains cautious but bullish.

"I have concerns about how a company maintains a sense of urgency when a legendary founder is no longer involved," Munster said.

The tech investor said that when a founder leaves a company, it can take growth levels off the table.

"Just ask Google and Microsoft what it feels like to lose it."

Munster says Nvidia needs to find a leader with a "core sense of urgency."

As an example, Munster highlights the struggles Apple had after Steve Jobs left in the 1980s, which shows "what can happen when that urgency wanes."

Jobs later returned and brought back a sense of urgency that led to new, innovative products, Munster said.

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