Nvidia's 700,000% stock return faces succession test

Reuters Nvidia Corp. CEO Jensen Huang has an unusual office arrangement. He sits behind a large oval desk facing his senior executives, while other employees occupy stadium-style rows behind them. The setup at Nvidia's headquarters in Santa Clara, California, says a lot about how Huang runs the company. Most major decisions go through him, and he keeps a close watch on even the smallest aspects of the business. According to Bloomberg, Huang has around 60 direct reports, far more than most technology CEOs. They regularly send him emails outlining their "top five things", which he reads and responds to at all hours. A company built around Jensen Huang Hands-on leadership is hardly unusual in Silicon Valley, but Huang takes it to another level. He has been running Nvidia since its founding 33 years ago, making him one of the industry's longest-serving CEOs. In that time, the company has grown enormously, delivering a stock return of more than 700,000%. Yet Nvidia has no publicly identified successor. Also Read: Nvidia CEO Jensen Huang's affair with Chinese agent being looked into by FBI, says Trump That lack of a clear succession plan has come under renewed scrutiny following Huang's admission of an affair with a woman suspected of spying for China, Bloomberg reported. The episode has drawn attention to just how closely the company's fortunes are tied to its 63-year-old founder. Live Events "My management style is what made it possible for the company to grow," Huang told Bloomberg News' Emily Chang in a recent interview. He said his goal was to build an organisation that could adapt to change, whether by driving new developments or responding to shifts in the industry. Nvidia's board is now investigating whether Huang was targeted by a foreign agent. But the controversy has also brought a long-standing question to the forefront: what happens to Nvidia when Huang is no longer running it? "Nvidia got really big, really fast, and maybe they were just not prepared," Daniel Morgan, a fund manager at Synovus Trust Co., which owns Nvidia shares, told Bloomberg. He pointed out that companies such as Microsoft and Apple appeared to have potential successors ready, while Nvidia had continued to rely heavily on its founder. Huang's departure, should it happen, would be felt beyond Nvidia's boardroom. The company dominates the market for chips powering the artificial intelligence boom, and Huang has personally played a major role in securing deals and investing in businesses across the AI supply chain. He is also one of the industry's most visible champions of AI, regularly speaking about the technology's potential while playing down concerns about the risks it could pose to humanity. Nvidia is at the centre of circular AI deals For Nvidia, the heavy reliance on Huang presents what investors call key-person risk, where a company's future depends to an unusual degree on one individual. "Nvidia is not an ordinary company and Jensen is not an ordinary CEO," Stacy Rasgon, a longtime Bernstein semiconductor analyst, told Bloomberg. Also Read: Alice in Nvidia CEO's secret world: Jensen Huang's personal affair matters far beyond than what meets the eye People familiar with the matter told Bloomberg that Huang has appeared less involved in the company's operations in recent days. Unlike his usual practice, he has not been responding immediately to the regular "top five" emails sent by his executives. Such a change is noticeable because of how closely Huang typically monitors the business. His involvement extends well beyond product strategy and major corporate decisions. He is even known to personally review employee compensation. Despite the controversy, Nvidia's board would prefer to keep Huang as CEO if possible, another person familiar with the matter told Bloomberg. An independent committee is investigating the allegations. Investors wary of a leadership shake-up The uncertainty comes at an uneasy time for technology investors. Concerns that AI spending could begin to slow have already weighed on technology stocks. A leadership change at Nvidia, one of the biggest beneficiaries of the AI boom, would add another layer of uncertainty. The company has been the largest contributor to the S&P 500's gains in recent years, helped by a sharp rise in sales as demand for AI chips surged. Nvidia's revenue is expected to exceed $400 billion in the current fiscal year, up from less than $27 billion four years ago. According to Bloomberg, that pace of growth is faster than what Steve Jobs, Bill Gates and Jeff Bezos achieved during comparable periods. The company has also managed to maintain gross margins above 70%, an unusually high level for a semiconductor business. Investors recognise the role Huang has played in that success. "You would not want to see Jensen removed as CEO," Ken Mahoney, head of Mahoney Asset Management and an Nvidia investor, told Bloomberg. He described Huang as an exceptionally important figure for the technology industry and the growth of AI. Ross Gerber, head of Gerber Kawasaki Wealth and Investment Management, appeared less concerned about the possibility of an immediate leadership change. He estimated that Huang had a 75% chance of remaining CEO. "I don't think anyone canceled their chip orders over this," he told Bloomberg. Also Read: Jensen Huang's price of secret affair: NVIDIA CEO loses $7.4 billion in 30 minutes, drops 2 spots in top 10 richest list Huang founded Nvidia in 1993 alongside Chris Malachowsky and Curtis Priem. The company began as a niche supplier of graphics cards for PC gamers before becoming one of the biggest names in artificial intelligence. Much of that transformation took place under Huang, who steered Nvidia towards AI well before several of its Silicon Valley rivals recognised the scale of the opportunity. Huang wants his successor to come from within As for succession, Huang has said he would prefer the next CEO to come from within the company. He also hopes that the transition will not be necessary for another 20 years. "I take my job very seriously," he told Bloomberg's Emily Chang, adding that he does not take his position for granted. Huang has also said he deliberately chose not to become chairman so that the CEO would remain accountable to the board and could be removed if necessary. "Unlike many CEOs, I'm completely fireable," he said. Even so, Nvidia's board has deep ties to its founder. Six directors have served for more than a decade, including three who have held their positions for over 30 years, Bloomberg reported. Huang has also received backing from several prominent figures outside the company. Elon Musk, CEO of Tesla and SpaceX, supported the view that Huang is irreplaceable at Nvidia. US President Donald Trump described him as a "very honorable man" on Monday, while saying the FBI was investigating the matter. Billionaire investor Bill Ackman also defended Huang in a post on X, arguing that even exceptional people make mistakes and that Huang and his family deserved support. But the controversy has also prompted legal action. On Monday, a shareholder filed a proposed class-action lawsuit accusing Nvidia and Huang of misleading investors about the CEO's alleged ties to the suspected spy, or recklessly disregarding the information. Filed in federal court in San Jose, California, the lawsuit seeks to represent investors who purchased Nvidia shares between October 9, 2025, and Sunday's disclosure of the affair. No heir apparent in Nvidia's top ranks Whatever the outcome of the controversy, the question of who could eventually replace Huang remains unanswered. Among Nvidia's roughly 60 senior executives, none has been publicly identified as a potential successor. Part of the challenge is that Huang has become much more than the company's chief executive. He is also its most recognisable public face. He travels around the world, addresses large audiences, sig