Nasdaq futures fall as Nvidia leads AI stock rotation on Huang reports

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Nasdaq futures fall as Nvidia leads AI stock rotation on Huang reports

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Nasdaq S&P 500 Nvidia

Nasdaq-100 futures fell on Thursday as Nvidia shares dropped on reports that the company's board may remove CEO Jensen Huang. The decline led a rotation out of AI-related stocks, while Asian and European tech shares also lost ground.

Futures tied to the Nasdaq-100 lost 0.9% on Thursday, while S&P 500 futures fell 0.4%. Dow Jones Industrial Average futures added 17 points and traded around the flatline.

Nvidia drops on reports of a possible CEO exit

Selling in Nvidia resumed in extended U.S. trading after The New York Times reported that Huang had an extramarital relationship with an executive at the company. The Wall Street Journal also reported that the board is preparing to remove him.

Nvidia shares fell 7% in premarket trading on Thursday. Several analysts told CNBC that Huang's removal could send the stock down 20%, and Nvidia was already down more than 20% over the last month.

According to CNBC, Dan Ives of Yorkville Ives & Co. wrote: "the writing is on the wall that Jensen’s days at Nvidia could be numbered". Ives put Nvidia's value at $300 per share with Huang as CEO and $225 without him.

Chip stocks split as the AI rotation spreads

Nvidia's rivals moved the other way. AMD and Broadcom rose 3.9% and 3% in premarket trading, while Intel, Marvell, Arm and Qualcomm traded lower.

CoreWeave surged 25% on Wednesday after better-than-expected results and a raised revenue outlook. However, its shares moved 9% lower in premarket trading on Thursday.

The pressure reached other markets. In Europe, the Stoxx 600 Technology index fell 1.3% even as the broader Stoxx 600 added 0.3%. In Asia, Kospi declined 0.61% and the Nikkei 225 fell 0.70%.

Macro data adds to the caution

Wells Fargo Investment Institute's Sameer Samana said the firm would be circumspect about the bounce-back, citing stubborn inflation, more Fed rate hikes and higher long-term interest rates.

Investors now look to fresh inflation and labor market data. Initial jobless claims arrive at 8:30 a.m. ET, followed by existing home sales at 10 a.m.

Source: CNBC

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