Nvidia shares edge up as investors assess Jensen Huang's exit

What happened

Jensen Huang stepped down as chief executive of Nvidia on Thursday, according to CNBC. The resignation came after The New York Times reported that he had a romantic relationship with Kimberly Powell, a Nvidia vice president who leads the company's health care business.

Reuters separately reported on Thursday that Huang had another relationship with an Nvidia employee, whom the agency did not name.

How the stock reacted

The move followed a turbulent session on Thursday, when the stock fell sharply before recovering ground and finishing just over 4% lower.

The company's shares have already lost more than 20% of their value over the past month, so the leadership change adds pressure to an existing decline.

Why analysts saw Huang as central

Before the resignation, several Wall Street analysts told CNBC that Huang leaving could cost Nvidia as much as 20% of its market value. They argued he has been critical to the company's success.

Stephane Houri, head of equity research at ODDO BHF, told CNBC's Squawk Box Europe on Friday that much of Nvidia's success has been built around Huang. He said the significance extends beyond the company itself, pointing to the structure of the AI industry, which he said relied on Huang's vision and expertise.

The scrutiny behind the exit

Huang was already under scrutiny before the latest reports. Nvidia's board had investigated his relationship with a businesswoman whom intelligence agencies say is a Chinese spy, according to CNBC.

The New York Times report on the relationship with Powell, and Reuters' report of a second affair with an employee, followed that earlier investigation. Together they prompted the resignation on Thursday.

What it means for Nvidia

The resignation removes the figure who led Nvidia through its rise to dominance in chips for artificial intelligence. Investors now face uncertainty over both the company's leadership and its role at the centre of the AI industry.

With the stock already down more than 20% in a month and analysts warning of further losses tied to Huang's departure, the market reaction in coming sessions will be closely watched. Nvidia has not publicly commented on the reports, so details around the transition remain unconfirmed.