Nvidia loses £400bn in a week as boss quits after 'the most expensive affair ever'… denting UK investors' pots

Nvidia shares tumbled last night after boss Jensen Huang resigned – taking losses for the week to more than £400billionIn a move that sent shockwaves through trading floors around the world, the 63-year-old quit after cheating on his wife with a suspected Chinese spy and a fellow executive at the chipmaking giant. Hours after his resignation reports of a third mistress also surfaced.Nvidia shares fell 14 per cent in early trading yesterday before closing down 4.3 per cent, taking losses for the week to 11 per cent.That has wiped $490billion, or £409billion, off what was once the world's most valuable company in just four days - leading to veteran City commentator David Buik to dub Huang's actions the most expensive affair in history.Nvidia's share price has nosedived 30 per cent since its peak in early October, which has hit British savers pensions and stocks and shares Isas, as many will hold funds that feature a sizeable chunk of its shares. As the second biggest company in the world, it accounted for 5 per cent of the value of global stock markets at the start of October and so represents a major holding in global index funds favoured by UK investors. Former Nvidia boss Jensen Huang (pictured) quit after cheating on his wife with a suspected Chinese spy and a fellow executive at the chipmaking giantChief financial officer Colette Kress, who has worked at Nvidia since 2013, will take up the reins on an interim basis as it looks to appoint a permanent successor.The abrupt departure of Huang – following affairs with suspected Beijing agent Alice Huang, 42, and Nvidia's vice-president of healthcare Kimberly Powell, 48 – leaves the AI industry without its biggest champion.And it clouds the future of the chipmaker Huang built into a powerhouse over 30 years at the top of the company he founded.Nvidia has now lost more than 30 per cent of its value, or $1.8trillion, since shares peaked last month before the mood around AI soured. 'It leaves the company rudderless. He was so central to all their strategy, and it just highlights that there's quite a void there,' said Kathleen Brooks, research director at XTB.'It does throw the AI trade into a bit more confusion. You don't have someone who was a cheerleader for AI in the same way that Jensen Huang has.'Despite the crisis and concerns over its future, Nvidia remains one of Wall Street's favoured stocks with many brokerages still rating it a 'buy' or 'strong buy'.However, that support may be starting to fade, with a number of analysts downgrading their rating on the stock in recent days.Morgan Stanley and Bank of America Global Research this week removed Nvidia from their top pick lists, while brokerages including Wells Fargo and Citigroup cut their price targets.Tristan Gerra, an analyst at US investment house Robert W Baird, slashed his price target on the stock from $500 to $200.And analysts at US investment bank TD Cowen said: 'Huang's exit is shocking, unprecedented, and sad. We don't know the path forward for Nvidia. We remove Nvidia as a top pick given the uncertainty but want to let the dust settle before evaluating our investment thesis.' Nvidia chief financial officer Colette Kress (pictured) has taken the reins at the tech giant after Jensen Huang was forced to step downBut as Nvidia clawed back some losses, Chris Beauchamp, market analyst at IG, said: 'It's usually best to rip off a plaster rather than prolong the agony. Jensen's decision to fall on his sword and leave the company he led to global fame is probably the best thing for the stock and Nvidia.'While a Congressional investigation is sure to follow, Nvidia can declare the Jensen era at an end. Rock star CEOs can be a great help, but also a terrible Achilles' heel. For Nvidia, it may well be onwards and upwards.'Shares in smaller rival Advanced Micro Devices rose as investors bet it could cash in on the turmoil at Nvidia. The stock has gained 30 per cent so far this week.But other global AI stocks were hit amid fears Nvidia may change tack having provided billions of dollars financing infrastructure built around its AI chips.'Nvidia has been called the 'Bank of AI'. If they have to take a step back because of what's going on, will that cut off funding to smaller companies that need it? That's an open question,' said Joe Saluzzi, co-head of equity trading at Themis Trading. Why Nvidia matters to Britain's investors There's a strong chance Nvidia makes up a bigger chunk of your pension than the UK stock market - and that's why the scandal that has engulfed it and seen its superstar boss quit matters to you, explains Rachel Rickard StrausIf you've never bought shares in Nvidia, you may wonder what its share price and boss's infidelity has to do with you.But Nvidia is such a behemoth that most of us own a stake. If you hold a global fund, a US or technology one, or are simply paying into a workplace pension – you will have a chunk of your savings in Nvidia.> Read more: Why Nvidia is hurting our pensions and Isas 'The most expensive affair ever'Jensen Huang has lost $18billion in less than a week in what has been described as 'the most expensive case of infidelity in history'.The former Nvidia boss owns a 3.6 per cent stake in the company he ran for 33 years before quitting over two extra-marital affairs.The slump in the Nvidia share price since he admitted to being unfaithful to his wife on Sunday has wiped billions off his fortune.City commentator David Buik described it as 'the most expensive case of infidelity in history'.Huang has now lost $65billion since shares peaked in October. This dwarfs a potential pay-off of up to $385million.Huang has no contract and is described as an 'at-will' employee, meaning any severance package must be agreed with the board.Huang, who was paid $36million last year, was in line for bonus shares worth up to $440million but their value has fallen.At $166 yesterday, those shares are worth an estimated $385million.The company thanked Huang for his 'immeasurable contributions' but made no mention of a pay-off. Huang, whose $150billion net worth made him the 12th richest person in the world, could lose half of it if his wife divorces him.Trump says Tim Cook should take Nvidia jobFormer Apple chief Tim Cook has been touted as the next boss of Nvidia by no less a figure than Donald Trump – as speculation began over who will succeed Jensen Huang.Cook stepped down as chief executive of the iPhone maker in September after 15 years at the helm during which he oversaw a stunning rise in profits and share price. It was not immediately clear whether the 66-year-old will accept the task, which would see him move from boss of the world’s most valuable listed company to the second most valuable. Trump is backing former Apple CEO Tim Cook (pictured) for the Nvidia jobBut Cook already has experience of taking over from a charismatic leader viewed as irreplaceable – after succeeding Steve Jobs at Apple. And Trump wasted little time giving his view on the future of Nvidia in a social media post.‘Now that Nvidia CEO Jensen Huang, who has done a fantastic job, has resigned, there is only one man to take his place – Tim Cook of Apple,’ he said on social media. ‘A Legend replaces a Legend!’For now, Nvidia chief financial officer Colette Kress will take the reins of the company on an interim basis, making her arguably the most powerful woman in business.Kress, who previously worked at Texas Instruments, Microsoft and Cisco, joined in 2013. She said that at the time it was the smallest company she had ever worked for. Nvidia’s revenue was £3billion in the year that she joined and since then has climbed to more than £160billion. Now she will face the task of presenting its third-quarter results next week amid intense scrutiny. Last night, Kress said: ‘I am committed to building on the extraordinary foundation Jensen created over the last 33 years.’Nvidia said: ‘We are initiating a search for a permanent chief executive officer and will consider internal and external candidates.’Tech industry analyst Dan Ives said: ‘Colette Kress has built enormous credibility internally and externally, and we are big fans of her strategically.‘There is also a good chance Nvidia’s board looks to the outside for a CEO.‘This could include a host of names, including Tim Cook as a dark horse candidate in our view, given the global importance of Nvidia to the overall US tech industry.’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. 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