Jensen Huang is one of the OG tech entrepreneurs. Co-founding Nvidia in 1993, he led the company for over 30 years, making him one of the longest-tenured founder-CEOs in tech history and leading the AI revolution.
Seeing someone who built that legacy face this level of intense public exposure over personal matters is tough to watch.
I have genuine admiration and respect for Jensen’s accomplishment. Last night when I heard the news, and gripping headlines this morning, I was angry at Jensen for his lack of judgement and disappointed in how the media has sensationalized the issue.
From an investment perspective, our research at Hikmah Capital Corp. already had a negative outlook for Nvidia and this news just reinforced our thesis of slowing sales growth and increasing competition.
I’m not buying the dip in Nvidia shares as this scandal will not only be an overhang but it has materially impacted future growth prospects for Nvidia.
Any standing Jensen had to push back on Washington’s export sanctions against China has evaporated overnight. Expect regulators to scrutinize or even pull H200 export clearances and aggressively sever third-party intermediary networks in Southeast Asia that Nvidia relies on to sell in the region.
Not to mention, congressional oversight and internal governance reviews will become an operational drag on the company.
With Nvidia reporting earnings the following week, this entire saga casts a heavy shadow over forward guidance. If management is forced to walk back China revenue forecasts or price in deeper compliance friction, the stock’s valuation leaves very little margin for error.
I’m sitting on the sidelines and scouting for better opportunities elsewhere in the AI ecosystem.
Not investment or financial advice. Capital is at risk whenever you are investing.