Jensen Huang Debacle Weighs on Nvidia and the Market: 8 Key Items Shaping the Stock Market Thursday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to another mixed open with Nasdaq-100 futures selling off.

1. Two oil supertankers were disabled by massive explosions after they ignored warnings against using an “unauthorised route” in the Strait of Hormuz on Wednesday night, Iran’s Revolutionary Guards Navy said on Thursday. (Reuters)

While this will raise some questions about the latest round of peace talks, oil prices are lower on Thursday morning following reports that OPEC+ crude production rose in October, driven by higher Saudi Arabian output despite shipping disruptions through the strait.

As far as those peace talks go, in what we’ll call a “not very surprising” update, Iranian security chief Mohsen Rezaei said in televised remarks that Iran would not allow a single particle of enriched nuclear material to leave the country and there would be ⁠consequences if the U.S. launched new strikes. With Washington’s position being that nuclear issues must be a part of any negotiations with Iran, it would appear another stalemate is on the horizon.

2. Nvidia’s board is preparing to oust CEO Jensen Huang after he had two extramarital affairs, including one with a suspected Chinese spy and another with an employee. The board was planning to meet as soon as Wednesday to determine his future, people familiar with the matter said. (WSJ)

Nvidia Corp. is searching for a replacement for larger-than-life Chief Executive Officer Jensen Huang, a daunting challenge at the world’s most valuable chipmaker. The company has tapped an outside firm to identify potential candidates following reports of multiple extramarital affairs by Huang. (Bloomberg)

These and related headlines are going to push Nvidia (NVDA) shares, which are already in an oversold condition, into an even greater one. The near-term drama and questions are simply too high, and we are already seeing some Wall Street firms cut back their price targets as they assess what we can only call the non-Jensen factor in his role as some refer to him as “the godfather of AI.” Yet, these price targets, which as of early on Thursday morning range from $200 to $300 are well above the pre-market trading level of $160.

The risk is that NVDA shares will be dead money until these issues with Jensen are resolved, and even then, it may take some time. But as much as credit for a company may be ascribed to a popular or famous CEO, as we learned when Apple (AAPL) CEO Tim Cook took the reins from Steve Jobs, corporate benches tend to be deep, and companies have multi-year planning cycles.

A new CEO at Nvidia will have his or her work cut out for them, and that will bring opportunity for competitors in the Portfolio like Marvell (MVRL) and Broadcom (AVGO). But at the end of the day, Nvidia’s competitive position and the outlook for AI and data center demand as we see in our next two items give us reason to remain shareholders.

3. Taiwan’s Foxconn, the world’s largest contract electronics maker, said on Thursday it was confident about its business next year given strong AI demand as it reported forecast-beating quarterly profit, but it warned about supply chain tightness… The company, which does not give numeric forecasts, said it predicted “high double-digit growth” in 2027 for AI rack shipments. “Cloud and networking products already account for more than 50% of our revenue this year and we expect that share to exceed 60% over the next three to five years,”… Looking at the AI and consumer electronics supply chains, chips, memory and some key components are currently tight, which is a challenge facing the industry as a whole, Liu said, adding that he was cautious about the outlook for the PC segment. (Reuters)

Following CoreWeave’s (CRWV) quarterly results and guidance on Wednesday, the above from Foxconn reaffirms the demand picture for AI and data center as well as the headwinds facing the PC and smartphone markets.

To those comments, we will add the far stronger than expected Q3 2026 revenue from AI cloud company Nebius (NBIS) that was reported on Thursday morning. Nebius posted revenue near $981 million for the quarter, up more than 500% year over year and well ahead of the market’s $907 million consensus forecast. Nebius also shared a preliminary outlook for 2027 with its top line between $12 billion and $13 billion, up from $3.0 billion to 3.4 billion this year, and the $11.7 billion consensus. Management expect prepayments and financing against existing contracts with investment-grade customers to cover 75% to 85% of 2027 capex.

4. The election swung harder against data centers than polls predicted. In 40 out of 41 local ballot initiatives across the country, citizens voted to limit or prevent data center development. Still there are early signs that the Blue Wave that brought Democrats to power around the country will not send data center construction — and with it the U.S. economy — off a cliff. One analysis, from the investment bank Bernstein, estimated that in the most extreme scenario, 9 percent of projects that would have probably been built will no longer break ground. More realistically, they said, only 2 to 4 percent of future data centers will be canceled nationwide. (NY Times)

Shortly after the Blue Wave was called, we explained why we thought the outcome of the midterm elections wouldn’t disrupt the AI buildout as much as feared and we are seeing more analysis support that thinking. Are there questions and uncertainties that need to be addressed? Yes. We’ve seen this before with water, electrical and other utilities, and odds are we will see these related issues get settled out given the size of the economics at stake and arguably implications for the U.S. economy.

6. Home heating costs are expected to rise more than 7 percent on average across the country this winter, putting further strain on households that have been struggling with rising energy costs for many months. A new report by the National Energy Assistance Directors Association, an organization that represents state officials in seeking federal funding, warned that the disruptions caused by the war with Iran has contributed to high heating costs. The organization said households that rely on heating oil, most of which are in the Northeast and Alaska, face some of the biggest increases. (NY Times)

Companies are planning price hikes averaging 4% to 5% next year, with relatively little variance across industry sectors, company sizes and geographies, a new report details. The 2027 price increases are expected to account for 11% of revenue growth next year, according to a survey of 255 C-suite executives at software, industrial and business services companies in the United States and Europe with annual revenue between $100 million and $5 billion… In 2026, the report noted, these companies increased prices by 4.7%… (CFO.com)

More than a third of US small-business owners plan to increase prices in the coming months, the most in more than four years, pointing to persistent inflationary headwinds. (Bloomberg)

While the average price for a gallon of gas has moved below the $4 mark and sits around $3.90, per the latest from AAA, the findings from the National Energy Assistance Directors Association means we will be paying a bit more each month to heat our homes, offices and other structures. Meanwhile the survey findings from CFO.com points to other tailwinds for inflation on top of expected price increases discussed by consumer product companies in recent weeks. While the next inflation data point is Friday’s October PPI report, the above suggests a slow path to the Fed’s 2% target.

6. Humanoid robot production in the US will hit 300,000-400,000 units by 2030 and about 1.5 million units by 2035, J.P. Morgan said on Thursday, as the industry shifts from demonstrations to commercial deployment. Labor shortages, improving economics and rising production capacity are boosting humanoid adoption in manufacturing, logistics and warehousing, as businesses look to automate repetitive tasks. (Reuters)

Talk about a nice confirmation point for the Portfolio’s currently smaller-sized position in the ROBO Global Robotics & Automation Index ETF (ROBO).

7. Economic data today per TipRanks: Initial Jobless Claims (Weekly), Continuing Jobless Claims (Weekly), Existing Home Sales (October), EIA Crude Oil Inventories (Weekly), Monthly Budget Statement (October).

8. Companies reporting today per TipRanks: AM – Ascendis Pharma (ASND), Brookfield (BN), Cellebrite (CLBT), Figure Technology Solutions (FIGR), Hudbay Minerals (HBM), Intuitive Machines (LUNR), Nebius Group (NBIS), Ondas (ONDS), Siemens (SIEGY), Twist Bioscience (TWST), X-Energy (XE), YETI (YETI). PM – Applied Materials (AMAT), Arrowhead Pharmaceuticals (ARWR), Cerebras Systems (CBRS), Cisco (CSCO), dLocal (DLO), Nu Holdings (NU), StoneCo (STNE), Virgin Galactic (SPCE).

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long AAPL, AVGO, MRVL, NVDA and ROBO.