Good morning. I leave for three days on a beautiful mini-honeymoon, come back, open TMTB Slack and the first thing I see is Jensen as a bird. Anything else I missed?
QQQs -1.5%, NVDA -8% and Semis 2.5% giving back some of yesterday’s rally after the NYT report last night about Jensen’s 2nd affair and articles overnight saying the board is having a meeting to discuss replacing Jensen. Tech futures took another step lower this morning after NBIS’s -14% guide cut on 3p capacity push out.
Lots of questions and potential implications of Jensen getting ousted - lets go over a few.
The first is whether NVDA keeps its supply edge when its TSMC capacity rested on Jensen’s relationships. Second, does NVDA cut prices to defend share from AMD and ASICs? Then there’s the neocloud complex and all the deals Jensen made: NVDA has been the AI ecosystem’s lender of last resort. Does a more cautious successor reined in by the board, without Jensen’s speed (60 direct reports, no committees), unwind those deals rather than extend them? (MRVL, LITE, CRWV the co’s who have benefitted most from Jensen’s dealmaking). It also seems safe to expect a real crackdown on AI chips reaching unfriendly nations, with TheInfo already reporting this morning export curbs widening to 7 countries including Singapore. Whether Jensen gets ousted or not, it’s consensus NVDA now having to be cleaner than clean in how they operate.
Stock catching 5 downgrades this morning. Our favorite title of the bunch:
AMD +2% / AVGO +1% being seen as winners from this…The glass half full view of all this is NVDA has a huge market cap, and $’s need to be put to work somewhere else…
Jensen’s removal isn’t a foregone conclusion however. On X, Elon has backed calls for the board to wait for the investigation’s findings before acting, and Gavin Baker has suggested putting Jensen’s future to a shareholder vote.
Fwiw, here is how the prediction markets are handicapping things:
And who is next in line?
Great discussion all night in TMTB Slack and a good discussion on when to buy NVDA here. A good bull vs. bear take below, with gbellizzimotta arguing Jensen’s speed was the moat and ~7x CY28 isn’t enough to catch the falling knife, and ALC saying a derisked, buyback-heavy NVDA after Jensen already has the bad news priced in: