Nasdaq futures fall as Nvidia sinks 8% after hours on report board may oust Huang

By Joseph Adinolfi

Shares of AMD and Broadcom rise after hours, cushioning the Nasdaq-100 as most other chip stocks fall

Stock futures traded lower late Wednesday.

Nasdaq-100 futures (NQ00) fell nearly 1% on Wednesday evening after Nvidia shares dropped about 8% in after-hours trading, following a report from the Wall Street Journal that the chipmaker's board was preparing to oust CEO Jensen Huang. Nvidia shares (NVDA) had risen 2.9% during Wednesday's regular session.

Shares of Advanced Micro Devices (AMD) and Broadcom (AVGO) rose by about 4% and 3%, respectively, after hours. S&P 500 futures (ES00) fell 0.4%, while Dow futures (YM00) were flat.

CoreWeave (CRWV) and Nebius Group (NBIS) were among the Nasdaq-100's steepest after-hours decliners. Both are major Nvidia customers, and their businesses rely on renting computing capacity powered by Nvidia chips to companies developing and running AI models. Both stocks had rallied during regular trading after CoreWeave's most recent earnings report helped ease concerns about demand for AI infrastructure.

Intel (INTC) and Microchip Technology (MCHP) also fell after hours. The iShares Semiconductor ETF SOXX was down nearly 2%, FactSet data showed.

The PHLX Semiconductor Index has struggled since hitting a record high in June and is down about 20% from that peak. Weakness in chips has also weighed on the Nasdaq Composite COMP, which has fallen for four straight weeks through Nov. 6.

The Journal reported about an hour after Wednesday's closing bell that Nvidia's board was preparing to oust Huang. The report followed revelations of two affairs, including one with a woman U.S. officials suspect of working with Chinese intelligence, the Journal reported.

The New York Times reported earlier Wednesday that Huang also had an affair with an Nvidia executive who reported to him.

Huang acknowledged in a memo to employees Sunday that he had been unfaithful to his wife, but did not publicly identify anyone or provide details.

Nvidia's large weight in broad stock indexes means its shares can affect investors who own index funds through retirement accounts. Nvidia accounted for about 6.3% of the S&P 500 SPX as of the end of October, said Bryce Coward, chief investment officer of Meridian Wealth Management.

"Most Americans own Nvidia whether they meant to or not," he said.

Hannah Pedone contributed reporting.

-Joseph Adinolfi

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(END) Dow Jones Newswires

11-11-26 2012ET