The fallout from Nvidia’s (NVDA) board’s ouster of co-founder Jensen Huang from his longtime CEO role continues to reverberate through the tech and business worlds.
CFO Colette Kress has taken the reins as interim CEO, but myriad questions remain, from who will become the next permanent leader of one of the world’s most valuable companies to whether it will perform as well as it did before the Huang scandals.
All this comes as Nvidia is expected to report its third quarter results next Tuesday.
Last week’s turmoil will not impact earnings this quarter or next. Nvidia has locked in its sales well in advance, meaning its bottom line won’t suffer for some time, if at all.
Nvidia is expected to report earnings per share (EPS) of $2.47 on revenue of $109.2 billion. This represents a 90% increase in EPS and a 91% increase in revenue compared to the same period last year.
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Kress will be expected to acknowledge Huang’s departure and the company’s plans for the future during the call. And analysts will have many questions.
A number of analysts have already lowered or reduced their price targets on Nvidia stock.
Bernstein analyst Stacy Rasgon, who cut her price target from $400 to $200 and lowered her rating from outperform to market perform, wrote in a note to investors that Kress’ appointment is positive for the company.
“We see considerable uncertainty about the news that is likely to come, as well as the ability of any new CEO to truly replace Jensen given the rigor with which he has managed the company’s leadership and its relationships with customers, suppliers, employees and the broader industry ecosystem,” Rasgon wrote in a note to investors.
Tristan Gerra, an analyst at Baird Equity Research, said Huang’s resignation was a turning point for Nvidia, but the episode had yet to bottom out.
“Headwinds include potential additional senior executive departures, H200 impairment charges, potential risk channel revenue adjustments, potential litigation (and) fines, uncertainty until a new CEO is announced as well as the risk of a loss of market share in 2029 as customers make contingency plans on a major senior management transition and look beyond the current product roadmap, as well “than greater clarity on the next CEO’s views regarding customer financing,” Gerra wrote in a note to investors Thursday.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on @DanielHowley or contact us on Signal or Telegram.
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