Nvidia Shares: Should Investors Sell After Jensen Huang’s Exit? Here’s What Michael Burry Says

Nvidia announced on November 12 that Huang had resigned as president, CEO and board member with immediate effect. CFO Colette Kress was appointed interim CEO.

Prominent investor Michael Burry believes the transition could expose vulnerabilities in Nvidia’s business model.

Source : ABPLIVE AI

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Key points generated by AI, verified by newsroom

• Jensen Huang's sudden departure sharply impacted Nvidia's stock price.
• Investor Michael Burry warns of vulnerabilities without Huang's leadership.
• Burry also increased bearish bets against broader semiconductor markets.

Nvidia shareholders are confronting an important question following Jensen Huang’s sudden departure: can the chipmaker sustain its growth and defend its market position without the executive who led it for more than three decades?

Prominent investor Michael Burry believes the transition could expose vulnerabilities in Nvidia’s business model. He argues that the company’s rapid expansion was supported not just by its technology, but also by a network of customer relationships, investments and financing arrangements that Huang helped build. With a new chief executive at the helm, some of those arrangements could come under pressure, potentially slowing growth and reducing margins.

Burry, who became widely known for predicting the US housing market collapse ahead of the 2008 financial crisis, has maintained a bearish position on Nvidia. His latest comments also reveal that he has increased bets against the broader technology and semiconductor markets.

According to a report by The Financial Express, his advice to investors who continue to back Nvidia was unambiguous: “Get out.”

Nvidia Shares Slide After Huang’s Departure: What Happened?

The market reaction to Huang’s exit was immediate, although Nvidia shares recovered some of their losses during Thursday’s session.

The stock had closed at $173.73 on Wednesday before falling more than 14 per cent to an intraday low of $148.80 shortly after the market opened on Thursday. The decline took it to its lowest level since June 2025.

Nvidia subsequently recovered to close regular trading at $166.19, down 4.34 per cent* It edged higher to $167.84 in after-hours trading. Even after the partial recovery, the shares were nearly 32 per cent below their early-October peak of $243.37.

Nvidia announced on November 12 that Huang had resigned as president, CEO and board member with immediate effect. Chief Financial Officer Colette Kress was appointed interim CEO, while Harvey C Jones became the company's first-ever board chairman.

The company's filing with the US Securities and Exchange Commission (SEC) stated that the board accepted Huang's resignation on November 11. This was the same day The Wall Street Journal reported that directors were preparing to remove him. Nvidia did not disclose a reason for the departure.

Why Burry Thinks Nvidia Could Lose Its Customer Advantage

For Burry, the bigger concern is what Huang's exit could mean for Nvidia's relationships with customers.

In a series of Substack posts, he argued that Huang had been instrumental in developing the company's AI business and expanding the wider artificial intelligence industry, reported FE. Burry pointed to investments in AI companies and financial arrangements that helped customers fund purchases of Nvidia chips.

He believes these structures created significant financial leverage across the industry. He also alleged that customers were encouraged to buy chips even when they did not have an immediate requirement, partly because they feared Nvidia might reduce future supplies if they did not commit to purchases.

Burry's argument is that the change in leadership could alter this dynamic. Customers may feel less pressure to maintain existing purchasing commitments and could seek better commercial terms, delay orders or explore competing chipmakers.

That could have consequences beyond Nvidia's direct sales. If customer investments and financing arrangements lose momentum, the broader network of businesses built around its AI ecosystem could also face pressure.

“Nvidia’s business will not disappear,” Burry wrote. “But its growth may slow and, critically, its margins may fall.”

Can Colette Kress Fill The Gap Left By Huang?

Burry has also questioned whether Nvidia's next chief executive will be able to take over the responsibilities Huang handled.

In a separate Substack post titled 'The Don Goes Down', he referred to reports that as many as 60 people reported directly to Huang and that he delegated relatively little of his work.

The investor suggested that this management structure could make the transition difficult, regardless of who is eventually selected to lead the company. He believes the business arrangements developed under Huang were closely connected to his leadership and could be difficult to replicate.

Burry described the commercial terms and financing architecture as the “secret sauce” that accelerated Nvidia's already strong technology position.

“The terms of trade and the architecture of financing were the secret sauce that supercharged an already dominant technology,” he wrote.

He cautioned that unwinding these arrangements would take time, describing them as a “Byzantine web” that would need to be untangled.

Nvidia has not announced a permanent successor. Its board is expected to consider both internal and external candidates, with Kress continuing as interim CEO during the process.

Burry Is Also Betting Against Semiconductor Stocks

Burry's latest disclosure suggests his concerns are not limited to Nvidia. He has increased his bearish exposure to the Nasdaq 100 and semiconductor stocks.

He said he used a recovery in the Nasdaq 100 after the index touched the 27,000 level to double his put position. These options have an early-2027 expiry date and a strike price roughly 20 per cent below the index's market level.

He also bought back 25 per cent of a June put position in the VanEck Semiconductor ETF (SMH) that he had previously reduced.

Burry believes a shift in Nvidia's position could have implications for companies that have benefited from its dominance in the AI sector. He identified Nebius, Taiwan Semiconductor Manufacturing Company (TSMC), ASML and CoreWeave among the businesses exposed to this ecosystem.

At the same time, he pointed to Broadcom and AMD as potential beneficiaries of a changing competitive landscape.

His broader assessment of the semiconductor sector remains cautious. “Semiconductor valuations still have a ways to fall,” he wrote.

He also repeated his criticism of the way technology companies report profits, arguing that their accounting earnings may not fully reflect the underlying financial picture. “Tech earnings are not what they seem,” he said.

Nvidia Had Previously Rejected Burry’s Criticism

Burry's latest comments follow earlier criticism of Nvidia's stock-based compensation and share buyback practices.

The company had pushed back against those concerns in a memo sent to analysts. Nvidia's management has also defended the durability of its hardware, saying its chips can be moved to other customers if required.

Meanwhile, the stock market reaction has not been uniformly negative across the semiconductor industry. AMD and Broadcom each advanced roughly 6 per cent on Thursday, according to Reuters. Cerebras also raised its revenue outlook on the back of stronger AI demand, sending its shares up 18 per cent.

The divergence in stock performance comes as investors assess whether Huang's departure represents a company-specific challenge or a broader turning point for AI-related shares.

What Happens Next For Nvidia Investors?

Nvidia's next major event is its fiscal third-quarter earnings announcement, scheduled for November 17. The company is expected to release its results as planned.

The leadership transition is also unfolding alongside scrutiny from US lawmakers. Three Republican House committee chairs had asked Huang to attend a closed-door briefing on November 18.

Separately, a class-action lawsuit filed in a federal court in California accuses Nvidia and Huang of inflating the company's share price.

Huang's departure has also drawn attention to reports about alleged personal relationships, including claims involving a woman identified as a suspected Chinese intelligence operative. Beijing has dismissed the spying allegations as a “smear”. According to NBC News, Huang has indicated that he is prepared to brief lawmakers on his contacts with the woman and Nvidia's internal security practices. Representative John Moolenaar said Huang had agreed to brief Congress.

US President Donald Trump has separately floated former Apple CEO Tim Cook as a possible permanent replacement for Huang.

Should Nvidia Shareholders Panic Or Hold On?

Burry's position is that Nvidia could face slower growth and pressure on profitability as the business adjusts to Huang's exit. His decision to increase bearish positions in the Nasdaq 100 and semiconductor ETF also reflects a wider concern about technology stock valuations.

However, his comments are an investor's assessment of the risks, not confirmation that Nvidia's business model will weaken. The company has not disclosed the reason for Huang's departure, and its board is still looking for a permanent successor.

For shareholders, the key issues to watch are whether Nvidia can maintain customer commitments, protect its margins and sustain demand for its AI chips during the leadership transition. The November 17 earnings announcement and the board's eventual choice of a permanent CEO are likely to be important developments in assessing the company's next phase.

Burry's warning has put the spotlight on the risks associated with Nvidia's dependence on Huang. Whether those concerns translate into a lasting change in the company's performance remains to be seen.