Dear Reader,
Good morning. Happy Saturday!
I hope you're getting a slow start to the weekend after the week we just had.
But first, let's talk about Nvidia.
On Thursday morning, Nvidia's board announced that Jensen Huang had resigned.
President, CEO and board member — all of it, effective immediately.
He co-founded the company in 1993.
He ran it for 33 years.
And in the space of one week, it was over.
First came the reports of an affair with a woman U.S. intelligence agencies say is a Chinese spy.
Then reports of a second affair, with an employee.
By Thursday, the board had seen enough.
The stock fell as much as 14% that morning before buyers stepped back in.
A lot of people have asked me the same thing since.
Should I sell?
Fair question. Let's dig in.
Question Two
You've heard me say this many times.
Before I buy any stock, I ask four questions.
Do I understand the business?
Am I comfortable with management?
What is the business worth?
And what do I have to pay?
Thursday blew a hole in question two.
I'm not going to pretend otherwise.
When a founder who has been the face of a company for three decades walks out the door overnight, that is a real risk.
And here's the part that bothers me most.
From what's been reported, there was never a real succession plan.
Huang was so central to Nvidia that nobody planned for the day he wouldn't be there.
That's a lesson for every investor, in every company you own.
What Didn't Change
Now let's go back to question one.
Do I understand the business?
Yes.
And the business didn't change on Thursday.
The chips are still the chips.
Every big AI company on the planet is still standing in line for them.
On Wednesday — one day before the news — CoreWeave reported revenue up about 168% and raised its outlook.
Its CEO said demand for AI computing power is still there.
Anthropic, about to launch one of the biggest IPOs in history, just lined up Nvidia as one of its strategic investors.
The interim CEO is Colette Kress.
She's been Nvidia's CFO since 2013.
She knows the numbers, the customers and the roadmap better than almost anyone.
And Harvey Jones, who has sat on the board since 1993, is now its first-ever chair.
Is that the same as having Jensen?
No.
Is it a company in chaos?
Also no.
I've Watched This Movie Before
When Steve Jobs died in 2011, a lot of people said Apple's best days were behind it.
Tim Cook wasn't a showman.
He was an operations guy.
What happened next is one of the greatest runs in stock market history.
I'm not saying Nvidia's story will play out the same way.
Nobody knows that yet.
But a great business with a dominant competitive position does not stop being great because of who sits in the corner office.
Bad management can ruin a great business over time.
A messy exit usually doesn't — not on its own.
What I'd Do Before Tuesday
Nvidia reports earnings on Tuesday, November 17th, after the close.
That's the next real test.
I'll be listening for three things.
Does the outlook hold?
Do the big customers stay on board?
And does the product roadmap stay on schedule?
If the answers are yes, then what we saw this week was a scandal, not a broken business.
If you own Nvidia, I wouldn't panic-sell into a headline.
Wait for the numbers.
And here's the thing almost nobody is talking about this week.
While everyone watches the empty chair, the work is still getting done.
Nvidia's next AI superchip could be even more lucrative than Blackwell.
And there's one small supplier Nvidia is counting on to help make it happen.
It doesn't need Jensen Huang's name on a press release to get paid.
It gets paid every time those chips get built.
Here's the full story on Nvidia's “secret supplier” >>>
Have a wonderful weekend.
I'll see you tomorrow.
“The Buck Stops Here,”
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Written by Dylan Jovine