By Daniela Hathorn, Senior Market Analyst, Capital.com
Days before earnings, Nvidia’s boardroom drama has turned a reputational issue into a leadership risk. Meanwhile, the UK economy is proving hard to knock off course, which only makes the Bank of England’s job harder.
Key takeaways
- Nvidia shares fell more than 8% in after-hours trading as its board met to decide CEO Jensen Huang’s future, wiping out Wednesday’s AI-led rally.
- More than $450 billion has been erased from Nvidia’s market value since the board announced its investigation on 8 November.
- UK GDP grew 0.7% in Q3, the fastest quarterly pace since early 2024, while September’s 0.2% rise beat expectations of no growth.
- The Bank of England is under pressure: stronger growth keeps another rate rise on the table at its 17 December meeting.
Markets: the AI recovery loses its footing
Global markets are struggling to hold on to yesterday’s attempted recovery, as renewed uncertainty around Nvidia weighs on sentiment towards technology stocks. Wall Street had a strong session on Wednesday, with the S&P 500 up 1.3% and the Nasdaq up 1.6%, helped by upbeat CoreWeave results and growing confidence in AI demand. That optimism did not last overnight. US futures have turned lower this morning, and Nasdaq futures are particularly exposed as investors reassess the risks around one of the most influential companies in the AI investment cycle. Asian markets have been mixed, showing how fragile the recovery remains despite encouraging signs of demand for AI infrastructure.
Nvidia: from reputational issue to leadership risk
The biggest development is the escalating controversy around Nvidia CEO Jensen Huang. Reports that the board met late on Wednesday to decide his future have turned what first looked like a reputational issue into a potentially significant leadership risk. The shares fell more than 8% in after-hours trading from their $173.73 close and were still down around 7% in pre-market trade this morning. Several brokers have cut their price targets, with Bernstein halving its target to $200. Huang has been central to Nvidia’s growth and to its relationships with major AI customers, so an unexpected leadership change could create uncertainty at an already sensitive moment for the sector.
“Nvidia’s fundamentals haven’t changed overnight, but its story has. Markets can price strong demand. What they struggle to price is uncertainty at the very top of the company at the centre of the AI trade.”
It is important to keep perspective. No departure has been confirmed. Nvidia’s board said on 8 November that it had no reason to believe national security or company secrets had been compromised, and an independent investigation is under way. The wider concern is that leadership uncertainty could undermine confidence in the AI trade just as investors were starting to regain some optimism about its fundamentals. Appetite for AI exposure clearly remains substantial: CoreWeave’s results lifted the sector this week, and Anthropic’s IPO is reported to be several times oversubscribed ahead of its planned pricing on 18 November. Still, the controversy raises questions about governance, succession planning and potentially US-China technology relations. If the investigation were to uncover evidence of compromised intellectual property, the consequences could extend beyond Nvidia to semiconductor manufacturers and cloud infrastructure providers. For now, this remains a potential risk rather than an established outcome.
The timing could hardly be more awkward. Nvidia reports third-quarter results on 17 November, with guidance pointing to revenue of around $108 billion. Investors now face the unusual challenge of weighing strong underlying demand against uncertainty over who will lead the company. A solid set of numbers may not be enough on its own: the market will want clarity on leadership as much as on data-centre sales.
UK: growth surprises, and complicates the Bank of England’s job
In the UK, this morning’s GDP figures paint a more encouraging picture. The economy grew 0.7% in the third quarter, in line with expectations and up from 0.5% in Q2. That is the fastest quarterly growth since early 2024, and output is 1.9% higher than a year ago. September GDP rose 0.2%, beating expectations of no growth after a flat August. Services did most of the work, rising 0.9% over the quarter, and the ONS pointed to AI and cloud-computing businesses as a key source of strength.
This resilience sharpens the Bank of England’s balancing act after last week’s rate rise to 4%, its first increase since 2023. With inflation at 3.5% and the Bank expecting it to approach 5% by mid-2027, stronger activity could reinforce expectations of further tightening at the 17 December meeting. However, higher borrowing costs and persistent inflation may eventually weigh on household spending and business investment.
“For the Bank of England, good news on growth is a mixed blessing. The more resilient the economy looks, the harder it becomes to argue that one rate rise will be enough.”
The key question is whether this resilience can last into the final quarter. Growth has improved, but construction contracted 0.7% over the quarter and consumer demand remains uneven. The recent fall in oil prices, with Brent now more than 20% below its October peak, could eventually ease pressure on inflation and household finances, but it will take time to feed through to spending.
What to watch:
- Nvidia board: any official statement on Jensen Huang’s position or interim leadership.
- 17 November: Nvidia’s Q3 fiscal 2027 results, after the US close.
- 18–19 November: Anthropic’s planned IPO pricing and Nasdaq debut, a real-time test of AI appetite.
- 11 December: UK October GDP, the first read on Q4 momentum.
- 17 December: Bank of England rate decision.
