Nvidia's stock drops as the board reportedly prepares to remove CEO Jensen Huang

By Britney Nguyen, William Gavin and Hannah Pedone

Nvidia's board of directors reportedly could meet as soon as today to determine the CEO's fate

CEO Jensen Huang is under increasing pressure.

Shares of Nvidia were falling more than 8% in Wednesday's extended trading session following reports indicating that CEO Jensen Huang had an affair with an employee and that the company's board was prepared to oust him from his role.

Huang reportedly engaged in a relationship with Kimberly Powell, an executive at Nvidia (NVDA) who reported to him, the New York Times wrote wrote, citing people who worked at the chip maker. Powell is listed as Nvidia's vice president of healthcare on the company's website.

The two executives were reportedly caught on video expressing affection for one another at a hotel in San Jose, Calif., on the sidelines of a company event earlier this year, according to the New York Times.

This adds to concerns that emerged over the weekend, when Huang admitted to having an extramarital affair. Reports indicated it was with someone the U.S. government believes could have been a Chinese foreign-intelligence asset.

Separately, the Wall Street Journal reported Wednesday that Nvidia's board was prepared to remove Huang from his post. The board was set to meet as soon as today, according to the story.

Nvidia didn't immediately respond to a MarketWatch request for comment.

"I don't think the board has any choice but to act if there is evidence of a second affair," StoneX analyst Cody Acree told MarketWatch. "Every company has an ethics mandate, and Nvidia is no exception to that."

Still, Acree noted that this would be no ordinary executive departure as Huang is synonymous with Nvidia, which he co-founded in 1993. There are also broader implications for the world of artificial intelligence, given Nvidia's central role in powering AI models with its signature chips.

"Without Nvidia, there is no AI industry," Acree said.

That said, shares of Nvidia rivals Advanced Micro Devices (AMD) and Broadcom (AVGO) were up nearly 4% and almost 3%, respectively, in after-hours action Wednesday following the reports.

The matter could "provide an opportunity to Nvidia's competitors such as Advanced Micro Devices if clients worry about instability around Nvidia," Jack Gold, president of J.Gold Associates, told MarketWatch.

-Britney Nguyen -William Gavin -Hannah Pedone

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11-11-26 1808ET