Nvidia Shares Fall 4% as Cramer Calls for Profit Taking After CEO Departure

Nvidia has lost 12% of its value this year, a decline that intensified on Thursday after the company's co-founder and chief executive, Jensen Huang, stepped down.

The departure followed a series of personal disclosures, including an admitted affair with an executive at a Singapore-based cloud firm suspected by U.S. intelligence of spying for China. Reports later emerged of relationships with two internal Nvidia employees, one of whom reported directly to Huang.

Colette Kress, the company's longtime finance chief, was named interim CEO to manage the transition. The stock price reflected the uncertainty, closing Thursday down more than 4%. At its lowest point in the morning session, the shares had slid over 14%.

CNBC's Jim Cramer offered a direct assessment of the situation during the network's Investing Club Morning Meeting livestream on Thursday. He asked his audience if Huang had betrayed the shareholders. His answer was definitive: "Yes. End of story."

Cramer argued that the company's future does not depend on the individual who built it into one of the world's most valuable firms. He described the post-Huang Nvidia as a different entity, one that would operate with tighter organization and greater discipline in spending.

The criticism extended to Huang's investment strategy, specifically the equity portfolio he assembled. This includes a $5 billion stake in Intel acquired in 2025 and a $2 billion investment in AI cloud provider CoreWeave earlier this year. Cramer noted that he had previously pressed Kress to reduce these positions, but Huang chose to retain them.

Cramer suggested that new leadership might allocate capital more carefully. He proposed selling some of these investments and using the proceeds for larger stock buybacks. He expressed strong confidence in Kress, citing her command of the company's operations and finances as she navigates investigations that may reach Washington, D.C.

Nvidia did not respond to a request for comment on the remarks. Heller, the crisis public relations firm reportedly hired by Huang as early as last year, also did not respond. Cramer pointed to Nvidia's large cash reserves and the earnings report scheduled for Tuesday evening as signs of underlying strength, though he warned that strong numbers might not calm investors immediately.

The risk environment remains active. Investigations into Huang's conduct and potential violations of U.S. chip export restrictions could lead to sanctions affecting international operations. Meanwhile, rival Advanced Micro Devices advanced its own AI chips, with AMD shares jumping almost 6% on Thursday for a fifth consecutive winning session.

Despite the risks, Cramer advised caution rather than exit. He urged longtime holders with large gains to consider locking in some profits, noting that several analysts have already downgraded the stock from buy to hold. He cited the company's deep engineering bench and multiyear product roadmap as reasons to remain invested, comparing the leadership change to the transition from Steve Jobs to Tim Cook at Apple.