Episode summary
The Investment Committee reacts to Nvidia's stock after Jensen Huang's resignation
CNBC Halftime Report
· · 6 min · Hosts: Scott Wapner, Rob, Steve Weiss, Bill Baruch, Joe Terranova, Morgan Brennan, CNBC Halftime Report · Guests: Seema Mody, Stephanie Link, Frank, Malcolm, Jensen Wong
Summary
The panel reacted to Nvidia’s sharp pullback after Jensen Huang’s resignation, with one investor after another arguing that the stock’s future now depends less on fundamentals than on leadership and credibility. One panelist said Nvidia’s business remains extraordinarily strong, citing expectations for a very good quarter, roughly $300 billion in free cash flow, and growth in revenues and gross margins next year, but argued the stock may trade in a range for 6 to 12 months because of investigations, leadership changes, and potential departures. That same speaker sold Nvidia and rotated into Micron, which was described as cheaper and cleaner, with a possible buyback ahead.
Another panelist said the biggest reason to own Nvidia had “left the building” with Jensen Huang, arguing that the resignation changes the market’s willingness to assign the company a premium tied to its central role in AI. The panelist pointed to uncertainty around national security, access, and relationships that could weaken Nvidia’s strategic position.
A third panelist pushed back, saying Nvidia has already been trading at a below-market multiple and that the recent drop was driven by earlier selling pressure around hyperscaler capex fears, election uncertainty, and semiconductor sentiment. That view was that the stock may still deliver market-beating returns over time, but the group agreed that clearer communication from the company is now essential.
Key takeaways
- One panelist sold Nvidia despite strong fundamentals, saying the stock could stay range-bound for 6 to 12 months because of leadership and investigation overhangs.
- The same investor shifted toward Micron, calling it cheaper at about five times earnings with a possible buyback in early December.
- Another panelist argued that Jensen Huang’s exit removes the main reason to own Nvidia and could undermine the company’s strategic premium.
- A bullish panelist said Nvidia already trades at a below-market multiple and may still earn an above-market return over the next 1 to 2 years.
- The committee agreed that communication from Nvidia’s board and interim leadership will be critical after the resignation.
Notable quotes
“THE FUNDAMENTALS ARE VERY, VERY STRONG AT THIS COMPANY. AND I EXPECT THE QUARTER NEXT WEEK TO BE VERY GOOD”
“THIS STOCK IS NOT GOING TO TRADE ON FUNDAMENTALS. I DON'T THINK FOR A WHILE BECAUSE YOU HAVE THE OVERHANG”
“THE WHOLE REASON THAT I WANTED TO OWN THE STOCK IN THE FIRST PLACE HAS LEFT THE BUILDING”
“EVERYTHING RELATED TO NVIDIA LEFT WITH THE CEO”
“THERE'S BEEN THE PROMISE THAT NVIDIA IS AT THE CENTER OF LITERALLY EVERYTHING”
How the episode opens
Ceo Jensen Wong's larger than life vision into numbers. Back to you. — Seema Mody with the very latest on Nvidia, Nvidia shares pulling back just about 5%. And now we get to our trade alert. Stephanie Link want to come over to you. You sold your Nvidia shares. Just give us some context. You bought back on july 8th at about 204. You sold yesterday. Kind of give us the thesis on why you decided to get out.
Yeah, it. — Was really hard.
Decision though, Frank, because the fundamentals are very, very strong at this company. And I expect the quarter next week to be very good with $300 billion in free cash flow. Next year they're going to grow revenues in 28 of 70% in gross margins in the mid 70s.
But this stock is not going to trade on fundamentals. I don't think for a while because you have the overhang of the investigations of leadership changes of potential departures. And so I think it's really for me as as an investor, I'm thinking the opportunity cost here because I do think it's going to be kind of in a trading range for the next 6 to 12 months.
In my opinion. I will not have a problem buying the stock back if we get a really amazing leader and we can get past this. But I think we have time.
And as a result, I actually added to Micron because that stock is down just as much from its high 35%. And the fundamentals are very attractive and it's trading at five times earnings. And I think they're going to announce a buyback in when they report earnings in early december.
So that has clean fundamentals clean story cheap stock. Whereas Nvidia is just not clean at this point.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- nvidia leadership resignation
- stock volatility
- valuation versus fundamentals
- micron buyback outlook
- ai semiconductors trading range
Companies and tickers mentioned
- NVDA
- MU
- Nvidia
- Micron
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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