Nvidia reports quarterly results on Tuesday, days after CEO Jensen Huang resigned. Analysts say the call matters for the company and the broader market, though several expect executives to stay cautious on questions about Huang.
Nvidia's quarterly report on Tuesday comes with an earnings call set to be one of the most anticipated of this century. Wall Street is trying to work out what Huang's resignation on Thursday means for the company, artificial intelligence and the wider economy.
Interim CEO and an open board investigation
Nvidia's board is investigating Huang's relationship with a woman linked to a Singaporean customer, whom the U.S. government reportedly believed was a spy for China. Reports of two other affairs with Nvidia employees have emerged since then. The company didn't respond to a MarketWatch request for comment.
Nvidia has appointed Colette Kress, its chief financial officer, as interim CEO. Mark Malek, chief investment officer of Siebert Financial, said the interim title means the real decision is still ahead and the investigations remain open.
Stock slides before the call
Nvidia's stock fell 8.9% over the past five days and around 25% over the past month, as of Friday. Huang's resignation, the growing cost of AI development and the prospect of more scrutiny under a Democratic-controlled Congress keep investors worried, according to MarketWatch.
Huang's exit has also raised questions about Nvidia's business with China, its circular financing deals and oversight in Washington. Nvidia has regularly been among the biggest contributors to the S&P 500's earnings growth.
Analysts expect a guarded call
D.A. Davidson analyst Gil Luria said executives are likely to stay cautious on Huang-related questions. According to Luria: "It’s very important that they can communicate a steady hand on the wheel."
StoneX analyst Cody Acree suggested the call was likely to draw a high level of attention but few fireworks. He said management would likely avoid questions on the matter until the investigation yields more information.
Gabelli Funds portfolio manager Hendi Susanto called the departure a shock, but said customers were unlikely to cancel orders and saw no major impact on the roadmap at least in the next two years.
Source: MarketWatch
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