Nvidia shares fell more than 10% on Thursday following the resignation of CEO Jensen Huang. The company entered a bear market on November 9, dropping 20% from its peak. Nvidia has appointed its finance chief as interim CEO, a move previously taken by Intel in 2018, when its stock dropped 11.7% that year.
Major companies including Amazon, Microsoft, Alphabet, Meta, and Oracle are projected to spend $660 billion on AI infrastructure this year, a 60% increase over 2025. Anthropic has reported $895.4 billion in data-center commitments through 2045 and plans to raise up to $64.4 billion next week at a valuation of up to $1.4 trillion.
The financial structure of the AI sector relies on circular financing, where suppliers like Broadcom lend funds to companies like Anthropic to purchase hardware. Analysts note that Jensen Huang personally negotiated many of these deals, raising concerns about the sustainability of these arrangements under new leadership.
Market indicators show mixed signals for the sector. The S&P 500 CAPE ratio is near 40, while margin debt reached $1.48 trillion in September. Additionally, the 10-year Treasury yield has risen to about 5%, with a 90% probability of a Federal Reserve rate hike in December according to CME FedWatch.
Investors are monitoring three key upcoming dates: Nvidia's earnings report on November 17, the expected Anthropic IPO on November 19, and the Federal Reserve decision on December 9. Analysts suggest that if AI stocks decline, capital could shift toward assets like gold, bonds, or Bitcoin.
