CNBC’s Jim Cramer criticized the former Nvidia CEO Jensen Huang was accused Thursday of endangering the chipmaker’s future.
“Has he betrayed you, the shareholders?” » asked Cramer. “Yes. End of story.”
Huang resigned Thursday morning following reports of an affair with an Nvidia executive who reported to him. Hours later, Reuters reported that he was in an “intimate relationship” with a second employee. The revelations came days after Huang admitted to having an affair with an executive at a Singapore-based cloud computing company, whom U.S. intelligence agencies suspect of spying for China. Longtime CFO Colette Kress has been named interim CEO of Nvidia. Cramer said Huang’s departure was necessary to protect Nvidia from further fallout.
Shares ended Thursday down more than 4%, but at their morning lows, the stock was down more than 14%. Thursday’s drop brings Nvidia’s losses this year to 12%.
While questions remain about the future of the AI chipmaker, Cramer argued that Nvidia’s future extends beyond the executive who helped make it one of the most valuable companies in the world. “There will be no better Nvidia, just another one (without Huang),” Cramer said, envisioning a company that is better organized and more disciplined in its investments.
Under Huang, Nvidia built an extensive equity investment portfolio that included a $5 billion investment in Intel in 2025 and a $2 billion investment in an AI cloud provider CoreWeave earlier this year. These and other investments were part of Huang’s strategy to strengthen Nvidia’s position in the AI sector.
During the live broadcast of the CNBC Investing Club morning meeting on Thursday, Cramer recalled urging Kress to reduce the company’s stakes in Intel and CoreWeave, only to be told that Huang preferred to keep them. Cramer suggested that the new leadership could take a more disciplined approach to capital allocation, potentially leveraging some of these investments and returning the proceeds to shareholders through even larger share buybacks.
Cramer expressed confidence in Kress, praising his deep understanding of Nvidia’s operations and finances. He argued that the longtime CFO is well-positioned to provide stability as the company navigates the investigations surrounding Huang, which extend from the boardroom to Washington, DC.
Nvidia did not respond to CNBC’s request for comment on Cramer’s remarks. Heller, the crisis PR firm that Huang reportedly hired as early as last year, did not respond to CNBC’s request for comment.
Looking ahead, Nvidia’s underlying business remains strong, Cramer said, noting its substantial cash reserves and expectations for a strong earnings report Tuesday evening. However, he warned that even strong quarterly results may not be enough to reassure investors at a time of continued uncertainty.
Investigations into Huang’s conduct and possible violations of U.S. chip export restrictions could result in sanctions that would harm Nvidia’s international business. Meanwhile, competitors, including Advanced microdevicesare moving forward with their own AI chips, potentially threatening Nvidia’s market dominance. AMD shares jumped nearly 6% on Thursday, extending their winning streak to five straight sessions.
These risks have prompted Cramer to take a more cautious approach to Nvidia stock, especially after the substantial gains the stock has generated over the years for Cramer’s Charitable Trust, the 32-stock portfolio managed by the Club. On Tuesday, as Huang’s future at Nvidia looked increasingly uncertain, the Club lowered Nvidia’s rating to an equivalent rating.
“Never turn a successful investment into an unsuccessful trade,” he said, urging longtime shareholders enjoying big gains to consider taking profits. “You don’t want to give up all your gains if the stock continues to fall. It fell further today after many analysts jumped ship and downgraded the stock from buy to hold. There could be more to come.”
At the same time, Cramer cautioned against abandoning Nvidia altogether, pointing to the company’s extensive engineering expertise and multi-year product roadmap as reasons to believe it can continue to compete at the forefront of AI without Huang.
The “Mad Money” host also drew parallels with Apple leadership transition from Steve Jobs to Tim Cook, suggesting that Nvidia could benefit from a similarly-capable successor who would bring a different management style without sacrificing the company’s technological edge.
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