Nvidia Corp. (NASDAQ:NVDA) CEO Jensen Huang‘s personal scandal could ripple well past the chipmaker. Two of the companies with the most at stake are neocloud providers CoreWeave Inc. (NASDAQ:CRWV) and Nebius Group N.V. (NASDAQ:NBIS).
- NVDA stock is sinking. Get all the details here.
Huang admitted to an extramarital affair in a memo to employees on Sunday, and Nvidia’s board launched an investigation as U.S. intelligence agencies suspect the woman involved of being a Chinese spy.
Nvidia stock had already entered a bear market as investors grew nervous about AI spending and Democrats took control of the U.S. Congress.
D.A. Davidson analyst Gil Luria said on CNBC Monday that the scandal poses a real threat to neoclouds.
Luria reasoned that Nvidia’s bets on CoreWeave and Nebius were largely Huang’s own decision, so anything that weakens Huang weakens the strongest backer either company has.
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A Bet Tied to One Man
Nvidia invested $2 billion in CoreWeave in January at $87.20 per share, nearly doubling its stake and becoming the company’s second-largest shareholder.
In March, Nvidia agreed to put $2 billion into Nebius for a stake of about 8.3%.
Huang has championed both companies in public, and Nvidia supplies the GPUs that fill their data centers. Investors have treated the chipmaker’s support as a safety net.
A leadership change at Nvidia would raise new questions about whether the next person in charge would keep writing checks.
Bernstein analysts expect the Huang overhang to linger “for a while,” CNBC reported.
Earnings Week Adds More Unknowns
Both neoclouds are set to report this week. CoreWeave posts third-quarter results after the close on Tuesday, with a call at 5 p.m. ET. Nebius reports Thursday before the opening bell.
Expectations remain steep. Analysts expect CoreWeave revenue of about $3.55 billion, up roughly 160% from a year earlier, while Nebius is expected to post about $908 million, a sixfold jump, according to Benzinga Pro data.
Shares of each have fallen roughly 35% to 40% over the past month.
Options traders see big swings ahead. Benzinga Pro data show an implied move of about 20% for Nebius. After its prior report, Nebius jumped more than 34% when management said demand was strong enough to sell out its 2027 capacity.
Neocloud investors have plenty to weigh heading into this week’s earnings reports, from Nvidia’s leadership turmoil and a new Democratic Congress to lingering doubts about AI spending and how CoreWeave and Nebius plan to fund their buildouts.
On the calls, financing will likely get as much attention as growth. CoreWeave and Nebius need steady access to capital to keep building, and any doubt about Nvidia’s backing could make that capital more expensive.
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