Duan Yongping and Dan Bin discuss Jensen Huang's resignation: the impact on NVIDIA is limited in the short term, and its long-term development depends on the competitive landscape.

On the evening of November 12 Beijing time, NVIDIA released a statement saying that Jensen Huang has resigned from his positions as President, Chief Executive Officer and member of the board of directors, effective immediately. Colette Kress, the company's current Executive Vice President and Chief Financial Officer, has agreed to serve as interim CEO. Kress will continue to perform her duties as Executive Vice President and Chief Financial Officer until a formal successor is confirmed. Publicly available information shows that Kress joined NVIDIA in 2013, and fully witnessed the entire process of the company's transformation from a traditional graphics chip manufacturer to a global leader in AI computing power.

NVIDIA's board of directors has currently launched the selection process for a formal CEO, and will comprehensively consider internal and external candidates, while appointing Harvey C. Jones, who previously served as CEO of Synopsys, as the first chairman of the board in the company's history.

After the news was released, NVIDIA's stock price quickly dived at the opening, once plummeting by more than 13%, and the market value briefly evaporated by about 500 billion US dollars during the trading session. A huge number of sell orders poured out concentratedly, the trading volume exceeded 600 billion US dollars within one hour of opening, panicked funds left the market in clusters, while bottom-fishing funds took over chips at low positions, leading to fierce long-short game.

As the trading progressed, the decline gradually narrowed, and fell back to around 4% at the closing stage, with the market value returning above 4 trillion US dollars. The violent stock price fluctuation essentially reflects the market's re-pricing of NVIDIA after "losing Jensen Huang".

For the future value of NVIDIA, two iconic figures in the investment circle, Duan Yongping and Dan Bin, also expressed their views.

On the Xueqiu platform, Duan Yongping continuously responded to netizens' questions through the account "Daowu Wuxing Wo Youxing". When a netizen asked about the impact of Jensen Huang's resignation on NVIDIA, Duan Yongping wrote: "This is probably the final decision of the board of directors. It will not affect NVIDIA's business in the short term, but in a few years, it will depend on whether they can find a good CEO. Jensen Huang is a very hardworking person, and he also has a great vision for the prospect of AI, so it is very difficult to find such a person."

In another reply, Duan Yongping said NVIDIA is the kind of company that can be managed in a "foolproof" way. "NVIDIA's business model requires a very good management team, otherwise it may not be that powerful in 3-5 years. However, AI has just started, and it is expected to achieve good growth in the next ten years."

He also added his judgment on the possibility of Jensen Huang's return, believing that if the core reason that prompted Jensen Huang to resign is not eliminated, he will most likely not return to his post, but there is a possibility that the company will invite him to serve as a consultant, playing a role similar to a "shadow CEO", retaining influence but no longer having the power to sign for decisions, and a clear conclusion on this direction may not come out until after the hearing ends.

Image source: Duan Yongping's Xueqiu account

Dan Bin, Chairman of Shenzhen Oriental Harbour Investment Management Co., Ltd., said: "The boots have finally landed, no surprises. It is a pity that Jensen Huang is out, a key figure has left the center of the stage of the artificial intelligence era in this way. But I believe the wave of artificial intelligence is still surging, and will not end because of the 'departure' of a single person."

He also reminded investors that NVIDIA's management transition and strategy running-in both take time, which will open a rare window of opportunity for competitors. However, the deep barriers of the CUDA (GPU parallel computing platform + programming model launched by NVIDIA in 2006) ecosystem and the computing power industry chain cannot be subverted in a short time. As the competition pattern changes, the competition in the track will only become more intense.

When talking about the opportunities and risks at the trading level, Dan Bin also gave his observations. He mentioned the feature of expanded trading volume during the session: "600 billion US dollars of transactions in one hour, huge volume at the bottom, those who wanted to sell have cleared their positions, and those who are optimistic will continue to hold." In his view, under the leadership of Jensen Huang, NVIDIA has built a quite deep moat, and there is no sign of it disappearing in the short term, and we need to look at the competition situation in the long run.

"The current valuation is an advantage, the PE this year is about 16 times. If the growth momentum disclosed in the previous quarterly report is not affected by Jensen Huang's resignation, the PE next year will most likely be less than 10 times. Panic and bottom-fishing are just a thought apart." Dan Bin wrote.

In addition, he once again reiterated his consistent investment warning, advising the market not to invest with financing leverage. "Even if a black swan event with a very small probability occurs, it will lead to irreversible losses. A week ago, few people would have expected such a thing to happen. As long as you do not use financing, and the company's fundamentals can stand the test, there is still a chance to recover after the price falls; once you use financing leverage, one accident may make you lose all your capital."

Image source: Dan Bin's personal Weibo account

Across the ocean, US President Trump and Tesla CEO Elon Musk also commented on this incident. Trump described the incident as "heartbreaking", and publicly proposed that Tim Cook take over as NVIDIA CEO. "Jensen Huang has performed excellently, but he has now resigned, and the only candidate who can succeed him is Tim Cook, the executive chairman of Apple," he said, "Let one legend succeed another."

According to another report by China News Network, a netizen on the social platform suggested that Musk recruit Jensen Huang. In response, Musk replied, "That would be my honor."

Wall Street investment banks have also quickly launched a re-evaluation of NVIDIA recently. On local time November 11, Morgan Stanley has removed NVIDIA from its "preferred stock" list, but still maintains its "overweight" rating and a target price of 300 US dollars. Analysts at the bank pointed out that Jensen Huang's leadership is crucial to NVIDIA's strategic direction, and the company is expected to face great uncertainty in the short term.

US investment institution Baird downgraded NVIDIA's rating to "neutral", and lowered its target price from 500 US dollars to 200 US dollars. In addition, Bank of America Global Research also removed NVIDIA from its list of preferred US stocks, and many institutions including Wells Fargo and Citigroup have recently lowered NVIDIA's target price.

This article is from "Jiemian News", reporter: Song Jianan, published with authorization from 36Kr.