NVIDIA CEO resigns, stock price plummets; what's next

Watching Wall Street this hour, it is 11.11, and the Dow is climbing back up after taking a bit of a plunge in the 10 o'clock hour, you see, but back up 250 points right now. We're keeping an eye on that. We're also talking about the financial fallout as the NVIDIA CEO announcing his resignation today amid this ongoing investigation, a lot of questions about this kind of emerging Chinese spy scandal and what's unfolding with in the aftermath of what we're learning about affairs that that the CEO of the now ex CEO had. And so so what does all this mean for the market? What does it mean for other tech companies? What's the fallout? From all of this, again, we track this breaking news today. Joining us live now to help us make sense of all this, Dr. Kevin Bay, professor of finance at the University of Florida. Joining us live now via Zoom, Dr. Bay, thanks so much for joining us here on Fox Orlando Live. Hey, thanks for having me. Great. Great to be here. So first, I just want to get your reaction, your initial thoughts. Obviously, this is something we've been following for, you know, for a few days now as kind of this whole situation has unfolded. As far as the CEO announcing his resignation today, first of all, your reaction, what do you make of that? It's not unexpected after having such a dramatic set of events unravel over the last couple of days. Obviously, he's a great media figure. He's an icon. The leather jacket is quite popular. He's in the press quite a bit. So it's obviously strange to see a guy with that much presence be moved aside. But after such a set of events, it's not unlikely. To expect that a board of directors to get together and accept the resignation. Let's talk kind of immediate fallout here for for NVIDIA. We've already seen their stock kind of plunge as as all of these developments have come out. You know, in the in the past few days, we've got to we've got some of the numbers showing just, you know, a bit of the a bit of the roller coaster that that stock has been been going through. Where do things go from here? So I looked at the stock. We're down, what, 27% over the last month. Today alone is down 5%. five percent. It's basically the company, you think about it, they're selling everything they produce. So the fundamentals of the company haven't really changed. I think the bigger issue is the incredible amount of uncertainty that there exists right now. And we discount the future cash flows of the company, the present value of that, by the amount of uncertainty And there's great uncertainty. Who's going to take over the leadership spot? We know we have an interim CEO. There is now a board of directors chair that has been named. They've not had a board of directors chair. Jensen has basically been the board chair alongside an independent director. So we have some resolution to the uncertainty, but there's another piece of it, which is apparently Wang had 60 direct reports. And with a flat organization like that, it's a lot harder to continue what was the momentum and the direction and the management. So it'll be really interesting to see if this new interim CEO can take over and fill that role. Let's talk a little big picture, too, because I'm curious what the fallout might be for other companies like this. We're talking about NVIDIA, which is huge when it comes to tech, AI, things like that. Is there a ripple effect that we could see as the industry potentially as a whole kind of gets some more scrutiny when it comes to some of these things? Well, look, NVIDIA has set itself up as the gold standard of chips for the AI hyperscalers. I don't think the demand for the chips is going to change. It's possible. But look, what's really going to happen, what I think the fear here is that, let's say there are more foreign import or foreign export limitations. Interestingly, the effect of that would be that there would be more supply available to domestic buyers. So I almost wonder if that increases the supply for the domestic companies that are hyperscaling in the AI space, you know, for competitors. It's possible that some of the follow-on companies, the companies that are sort of nipping at their heels, maybe they see some sort of a market opportunity here. But the fact of the matter is, NVIDIA is selling absolutely everything they produce, and I don't see how that changes. So possibly some change and opportunity for competitors. Certainly, I think in their buyer base, there's a good opportunity, possibly, if there's foreign restrictions placed. Another item, and again, this leads to the uncertainty or drives some of the uncertainty is I wonder because of the national security implications of these chips, I wonder how involved we're going to get. How much involvement will we get from D.C.? And I could see, I know that Trump has already placed a few tweets out yesterday. He said Wong was a great guy. I think today there may have been a suggestion of putting Tim Cook in place. So depending how involved D.C. gets, we could see some strange outcomes. Yeah, and we are popping up that Truth Social post that you mentioned just a minute ago. Yes, suggesting Tim Cook of Apple taking his spot as CEO. So, So, yeah, interesting to see, will be interesting to see, you know, kind of what comes from that. We are just, what, just a few days away from the IPO of Anthropic as well, another big AI company. Is there any ripple effect, any impact for someone like them getting ready to kind of go public for the first time? Look, there's some possibility here. I think the majority of that comes from the uncertainty that comes. And it's why do we see the stock of NVIDIA down today? It isn't down over the last several days. Look, the trading volume in the last four days is four times what it normally is over the last month. So the trading volume is way up. There's a lot of uncertainty. There are people trading on that uncertainty. People are trying to buy options, sell options, et cetera, and try to to make some money here. And that's fine. As we see the uncertainty resolve, we're going to see the price probably go back up, all else equal. Same thing. We have Anthropic, in all likelihood, it's going to be pricing about a week from today and going public about a week from today. It's the uncertainty there as well. And one big player in the market, there is some spillover effect to other companies in similar spaces, Anthropic. Largely depends on these chips. So there's a possibility that we'll see greater uncertainty. Would that have the ability to, would there be some sort of a depressing effect on Anthropic's price? It's possible. The majority of the roadshow, So, um... or the majority of the pre-sale of the Anthropic IPO has already occurred. These last several days are just sort of a small roadshow to capture other people. So, a lot of those people have already figured out whether they're interested or not in buying the anthropic IPO, and I imagine a lot will be, so we're going to see quite an outcome there. All right. Interesting stuff to watch. Still a lot of questions about where things go from here, and so we will stay tuned for all of that. And Dr. Kevin Bay with the University of Florida, we really appreciate your expertise in helping us make sense of all of these developments. Thanks so much for joining us today. Happy to be here.