CNBC’s Jim Cramer criticizes predecessor Nvidia CEO Jensen Huang criticized the company on Thursday for putting the chipmaker’s future at risk.
“Did he betray you, the shareholders?” Kramer asked. “Yes. End of story.”
Huang resigned on Thursday morning following reports of an affair with an Nvidia executive who worked under him. Hours later, Reuters reported that he had an “intimate relationship” with a second employee. These revelations come days after Mr. Hwang admitted to having a relationship with an executive at a Singapore-based cloud computing company that U.S. intelligence agencies suspect of spying for China. Longtime CFO Colette Kress has been named interim CEO of Nvidia. Mr. Kramer said Mr. Huang’s resignation was necessary to protect Nvidia from further downturn.
The stock ended Thursday down more than 4%, but was down more than 14% at its morning low. Thursday’s session decline brings Nvidia’s loss to 12% this year.
While questions remain about the AI chip maker’s future, Cramer argued that Nvidia’s future extends beyond the management team that built Nvidia into one of the world’s most valuable companies. “There’s no better Nvidia. It’s just a different company[without Huang],” said Cramer, who envisions a company that is more organized and more disciplined in its investments.
Under Huang, Nvidia built an extensive equity investment portfolio that included $5 billion in investments. intel Investing $2 billion in AI cloud providers in 2025 coreweave At the beginning of this year. These investments and many others were part of Huang’s strategy to strengthen Nvidia’s position across the AI industry.
During a livestream of CNBC Investing Club’s morning meeting on Thursday, Mr. Cramer urged Mr. Kress to reduce his stake in Intel and Coreweave, but recalled that Mr. Huang said he wanted to keep his stake. Mr. Kramer suggested that the new management team may take a more disciplined approach to capital allocation, liquidating some of its investments and returning proceeds to shareholders through larger share buybacks.
Cramer expressed confidence in Kress and praised her deep understanding of Nvidia’s operations and finances. He argued that the longtime financial chief was well-positioned to provide stability as the company navigates an investigation into Mr. Hwang that extends from the boardroom to Washington, D.C.
Nvidia did not respond to CNBC’s request for comment on Kramer’s comments. Heller, the crisis communications firm that Huang reportedly hired early last year, did not respond to CNBC’s request for comment.
Cramer said NVIDIA’s underlying business remains strong, pointing to the company’s large cash reserves and expectations for a solid earnings report Tuesday night. However, he cautioned that even strong quarterly results may not be enough to reassure investors during this period of lingering uncertainty.
An investigation into Mr. Huang’s conduct and possible violations of U.S. chip export regulations could lead to sanctions that would hurt NVIDIA’s international business. On the other hand, competitors advanced micro deviceeach company is developing its own AI chips, which could threaten Nvidia’s market dominance. AMD stock rose nearly 6% on Thursday, extending its winning streak to five straight sessions.
Those risks have led Cramer to take a more cautious approach to Nvidia stock, especially after the stock delivered strong returns over the years to Cramer’s Charitable Trust, a 32-stock portfolio managed by the club. On Tuesday, the club downgraded NVIDIA to a hold equivalent rating as Huang’s future at Nvidia became increasingly in doubt.
“Never turn a successful investment into a failed trade,” he said, urging longtime shareholders expecting big returns to consider taking some profit. “You don’t want to give up all your gains if the stock falls further. It’s fallen even further today as many analysts have taken the plunge and downgraded the stock from buy to hold. There’s more to come.”
At the same time, Cramer cautioned against giving up on Nvidia completely, pointing to Nvidia’s extensive engineering expertise and multi-year product roadmap as reasons why he believes Nvidia can continue to compete on the AI front without Huang.
The host of “Mad Money” said something similar. apple’s The change in leadership from Steve Jobs to Tim Cook suggests that NVIDIA could benefit from an equally capable successor who brings a different management style without sacrificing the company’s technological edge.
