Nvidia Posts Sixth Straight Weekly Loss, Longest Losing Streak Since 2012
Nvidia shares fell 13% this week, their sixth straight weekly decline and longest losing streak since 2012, wiping roughly $1.7 trillion off its market cap.
Nvidia (NVDA) shares fell 13% this week, their sixth straight weekly decline, the longest losing streak since 2012. The chipmaker has lost about 30% of its value since the slide began in early October, a drop of roughly $1.7 trillion in market cap that pushed it below Apple.
Nvidia spent most of the year as the world's most valuable company. Investors turned bearish before this week's Jensen Huang saga, but selling accelerated in the past few days. Huang, who co-founded Nvidia and led it for 33 years, resigned on Thursday after two separate extramarital affairs were made public. The board named finance chief Colette Kress as interim CEO while it searches for a full-time successor.
Gil Luria, an analyst at D.A. Davidson, wrote in a report on Thursday that with the unfortunate departure of CEO Jensen Huang, he expects a challenging transition for NVIDIA over the next few months. Luria lowered his price target to $200 from $300 but maintained his buy rating.
HSBC downgraded the stock to hold from buy on Friday, with analyst Frank Lee cutting his price target to $170 from $365, implying upside of just 2.3% from Thursday's close. Lee wrote that the uncertainties will prevail until a permanent succession plan is laid out and the new CEO is able to demonstrate execution capabilities.
Nvidia fell 2% on Friday, extending a drop of more than 4% the previous session. The Nasdaq Composite fell 0.91% to 25,136.27 and the S&P 500 slid 0.4% to 7,561.67, while the Dow Jones Industrial Average rose 0.1% to 52,347.55. In delayed trading, NVDA was at $162.85, down 2.0%.
Nvidia is scheduled to report quarterly results on Tuesday. Analysts are projecting 91% year-over-year revenue growth to $108.9 billion, according to LSEG. Analysts at Oppenheimer wrote on Thursday that even though they see solid earnings, they expect fundamentals to take a backseat near term.
What remains unclear is how the leadership change affects Nvidia's role as a financier of AI infrastructure and its relationships with suppliers and customers. Thomas Martin of Globalt Investments told CNBC the search for a new CEO will take a lot of time and spur more uncertainty.