Key Takeaways
- • Nvidia shares fell more than 8% after hours on Nov. 11 after reports said the board was discussing replacing CEO Jensen Huang, following his admitted affair and an independent investigation.
- • The Wall Street Journal reported on Nov. 11, citing sources, that Nvidia's board was preparing to dismiss Huang and held a meeting that night to decide his future.
- • Bitcoin fell from a Nov. 7 close of $75,867.59 to as low as $72,727.27 on Nov. 10 on Binance's Tether market, a decline of more than 4% in three days, and recovered only to about $73,674 on Nov. 11.
- • Analysts flagged possible margin-call-driven selling of Bitcoin if AI stock losses spread, with Hilbert Group's Russell Thompson warning of a risk to $65,000 if the $71,900 trend support breaks.
- • Hotter-than-expected October CPI (up 0.4% versus 0.3% expected) and Strategy's removal from the MSCI USA Index, effective after the close on Nov. 30, add pressure, though 10x Research said the index deletion's spillover to Bitcoin would be limited.
Summary
Nvidia CEO Jensen Huang's future has become a source of uncertainty across financial markets after his admitted affair escalated into speculation about his departure. Nvidia closed up 2.87% at $173.73 in New York trading on Nov. 11, partly reversing a 9.51% drop over the previous two sessions. After the bell, however, the stock fell more than 8% as reports about Huang's status continued to emerge.
Huang acknowledged the affair in an open letter to employees on Nov. 8 and apologized to his family and staff. Nvidia's board then opened an independent investigation after reports said Huang had become a target for contact by a foreign intelligence agency. The board said it had no reason to believe national security or company secrets had been compromised and expressed confidence in Huang and the management team. The Wall Street Journal later reported on Nov. 11, citing sources, that the board was preparing to dismiss him.
The episode has made Wall Street more cautious. Baird downgraded Nvidia to neutral, citing uncertainty over next year's data-center spending, the possibility of slower AI demand and questions over Huang's future. Morgan Stanley kept its overweight rating but removed the stock from its top-picks list, stating that "Huang's leadership is critical to the company's strategic direction" and that short-term uncertainty would persist. Analyst Dan Ives said Nvidia lacks a clear succession plan, while Gil Luria of D.A. Davidson said the company could face difficulties if Huang stepped down immediately without one.
Bitcoin also weakened. On Binance's Tether market, it fell from a Nov. 7 close of $75,867.59 to as low as $72,727.27 intraday on Nov. 10, before recovering to around $73,674 on Nov. 11, still about 3% below its Nov. 7 close. Bitwise said the 30-day correlation between Bitcoin and the S&P 500 and Nasdaq 100 rose to around 0.8 during the selloff that began Nov. 5. Russell Thompson, chief investment officer at Hilbert Group, said losses in AI and semiconductor stocks could spill into deleveraging and margin calls, forcing sales of non-core assets such as Bitcoin, and that a break below the $71,900 trend support could risk a slide to $65,000.
Macro and index factors add to the pressure. The U.S. consumer price index for October, released Nov. 10, rose 0.4% month over month against a 0.3% market expectation, and Bitget Wallet analysts said it could strengthen expectations for a December rate increase. MSCI said on Nov. 11 that Strategy would be removed from the MSCI USA Index effective after the close on Nov. 30; Blofin Research estimated funds tracking MSCI indexes may need to sell about 13 million Strategy shares, worth about $1.6 billion. Markus Thielen of 10x Research said the removal was largely priced in and its spillover to Bitcoin would be limited. Matt Mena of 21Shares said Bitcoin could slide to $69,000 if it falls below $73,000, or recover to $85,000 by year-end if it holds that level and the stock-market rebound continues.
Huang acknowledged the affair in an open letter to employees on Nov. 8 and apologized to his family and staff. Nvidia's board then opened an independent investigation after reports said Huang had become a target for contact by a foreign intelligence agency. The board said it had no reason to believe national security or company secrets had been compromised and expressed confidence in Huang and the management team. The Wall Street Journal later reported on Nov. 11, citing sources, that the board was preparing to dismiss him.
The episode has made Wall Street more cautious. Baird downgraded Nvidia to neutral, citing uncertainty over next year's data-center spending, the possibility of slower AI demand and questions over Huang's future. Morgan Stanley kept its overweight rating but removed the stock from its top-picks list, stating that "Huang's leadership is critical to the company's strategic direction" and that short-term uncertainty would persist. Analyst Dan Ives said Nvidia lacks a clear succession plan, while Gil Luria of D.A. Davidson said the company could face difficulties if Huang stepped down immediately without one.
Bitcoin also weakened. On Binance's Tether market, it fell from a Nov. 7 close of $75,867.59 to as low as $72,727.27 intraday on Nov. 10, before recovering to around $73,674 on Nov. 11, still about 3% below its Nov. 7 close. Bitwise said the 30-day correlation between Bitcoin and the S&P 500 and Nasdaq 100 rose to around 0.8 during the selloff that began Nov. 5. Russell Thompson, chief investment officer at Hilbert Group, said losses in AI and semiconductor stocks could spill into deleveraging and margin calls, forcing sales of non-core assets such as Bitcoin, and that a break below the $71,900 trend support could risk a slide to $65,000.
Macro and index factors add to the pressure. The U.S. consumer price index for October, released Nov. 10, rose 0.4% month over month against a 0.3% market expectation, and Bitget Wallet analysts said it could strengthen expectations for a December rate increase. MSCI said on Nov. 11 that Strategy would be removed from the MSCI USA Index effective after the close on Nov. 30; Blofin Research estimated funds tracking MSCI indexes may need to sell about 13 million Strategy shares, worth about $1.6 billion. Markus Thielen of 10x Research said the removal was largely priced in and its spillover to Bitcoin would be limited. Matt Mena of 21Shares said Bitcoin could slide to $69,000 if it falls below $73,000, or recover to $85,000 by year-end if it holds that level and the stock-market rebound continues.
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