Nvidia rallied 3% Wednesday. Then the board called a meeting

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TECH BRIEF

Morning, and welcome to Front Research. Wednesday started as a relief rally and ended with the biggest leadership question in tech:

• Nvidia's board met Wednesday night to decide whether to remove Jensen Huang, after a second affair report; the stock fell more than 7% after hours

• CoreWeave jumped about 25% on a guidance raise and a $132.5 billion backlog, lifting the Nasdaq 1.6% and Apple to a record

• Leaked documents show OpenAI's third-quarter revenue rose about 50% to $10 billion, with a $10.9 billion operating loss

• Anthropic's IPO is reportedly oversubscribed several times, and bankers are weighing a higher price range

Here is what you need to know.

Nvidia's Board Weighs Removing Jensen Huang

• The Wall Street Journal reported Wednesday that Nvidia's board was preparing to oust Huang, possibly as soon as Wednesday night; Reuters confirmed a board meeting through a source

• The New York Times reported, citing five employees, that Huang had an affair with Kimberly Powell, Nvidia's vice president of healthcare, who reports to him

• Bloomberg reported the board is working with an outside firm to identify possible replacements

• Nvidia closed up 2.9% at $173.73, then fell about 7.5% after hours to near $160.50

• Why it matters: the world's most important AI supplier may lose its founder CEO five days before it reports earnings

The day turned in the final hour. Nvidia had rallied with the rest of the chip sector during regular trading, then the New York Times report on Powell landed in the afternoon and the Journal followed with news of the board's plans, according to ABC7 News. When the Times reached Huang by phone and asked about Powell, he declined to discuss it and hung up, the Reuters report carried by the Korea Times says. Nvidia and Powell did not respond to requests for comment, and Reuters could not verify the Times report. No outcome of the board meeting had been reported at the time of writing.

The governance math is simple. A majority of Nvidia's 11 directors can remove Huang with or without cause, and every director except Huang is independent. Only on Sunday the board had expressed confidence in him, after he admitted an earlier affair with Alice Huang, the businesswoman alleged to be a Chinese intelligence asset, and after it hired outside counsel to investigate. Huang, 63, owns about 3.6% of the company and has no obvious successor; one fund manager quoted by Reuters named CFO Colette Kress as a natural interim choice. Polymarket put the odds of Huang leaving by year end at 88%, with data center chief Ian Buck the favored successor.

The Washington pressure has not eased either. Huang faced a Wednesday deadline to accept a closed-door House briefing or risk a subpoena, and the FBI is examining whether national security information was compromised. The stock had already lost about 14% in November before the after-hours drop, according to Yahoo Finance. Baird cut the stock to Neutral and its target to $200 from $500 on Wednesday, while Morgan Stanley dropped it as a Top Pick under a stop-loss rule but kept an Overweight rating, per TheStreet.

Why it matters: Huang has run Nvidia for its entire 33-year history and personally shaped the CUDA ecosystem and the annual product cadence that keeps it ahead of AMD and custom silicon. A removal would add execution risk to the Rubin ramp and to hyperscaler relationships at the peak of AI spending, and it would hand the November 17 earnings call to a management team in transition. For investors the question shifts from "will the scandal fade" to "what is Nvidia worth without its founder," and the after-hours move of more than $300 billion in market value is the market's first answer. AMD and Broadcom rose after hours, a sign that some money is already rotating to rivals.

CoreWeave Revives the AI Trade

• CoreWeave's third-quarter revenue rose 168% to $3.66 billion, and its contracted backlog reached $132.5 billion

• It raised full-year revenue guidance to $13.0 to $13.3 billion and expects about $9 billion in customer prepayments over the next three months

• The CFO signaled no more unsecured parent-level debt through 2027 at current yields

• The stock closed up about 25% at $60.77; the Nasdaq rose 1.6% and Apple hit a record market value of about $5.16 trillion

• Why it matters: the most leveraged name in AI infrastructure eased the funding fears that drove last week's selloff

CoreWeave reported Tuesday after the close, and the market reaction came Wednesday. Adjusted operating income reached $379 million, about 10% of revenue, up from roughly 1% in the first quarter, and management said it raised prices this year, according to The Motley Fool. The company still posted a net loss of $709 million and carries about $47 billion of debt, with fourth-quarter interest expense guided to $1.05 to $1.15 billion. Capital spending this year is expected at $37 to $39 billion.

The financing message mattered most. CFO Nitin Agrawal said CoreWeave would rely on financing secured by specific assets and customer contracts rather than more unsecured debt, and the $9 billion in prepayments means customers are funding part of the buildout. Adjusted operating income guidance of $1.275 to $1.375 billion beat the $1.07 billion analysts expected, per TheStreet. The stock had lost more than 40% over the prior month.

The rally spread across the AI supply chain. Sandisk, Micron and SK Hynix each gained more than 10%, Bloom Energy rose about 16% and Nebius about 15%, according to Yahoo Finance. The S&P 500 closed up 1.31% at 7,619.38 and the Nasdaq up 1.60% at 25,466.19, erasing its post-election losses. Coherent rose 18% and Lumentum 12%. Some of the gain reversed after hours on the Nvidia news, with CoreWeave down about 6%.

Why it matters: last week's AI selloff was driven by worries that neoclouds could not fund their commitments. CoreWeave answered with better margins, customer prepayments and a plan to stop issuing expensive unsecured debt, which supports the debt markets that finance AI data centers more broadly. The risk is concentration: much of CoreWeave's backlog depends on a few labs, including OpenAI, whose own finances are the next story.

OpenAI's Revenue Hits $10 Billion a Quarter, and So Do Its Losses

• Internal documents reviewed by the Wall Street Journal show third-quarter revenue rose about 50% to $10 billion from about $6.7 billion

• The adjusted operating loss widened to about $10.9 billion from $10.1 billion

• Adjusted operating margin improved to -109% from -150%

• Enterprise became the largest revenue source, with enterprise revenue roughly doubling quarter over quarter

• Why it matters: OpenAI now has public comparables, and Anthropic's prospectus makes the gap hard to ignore

The figures come from documents reviewed by the Journal and reported Tuesday, according to Euronews. OpenAI lost about $1.09 for every dollar of revenue in the third quarter, down from about $1.50 in the second, per Forbes. Consumer sales rose about 20% while demand for AI coding tools drove much of the enterprise growth. ChatGPT has more than a billion weekly users.

The comparison with Anthropic is unflattering. Anthropic's prospectus shows third-quarter revenue of $16.96 billion and an operating loss of $567 million, which puts OpenAI's revenue at about 59% of Anthropic's with an operating loss roughly 19 times larger. Forbes notes the numbers are not on the same basis: OpenAI's are adjusted internal figures, while Anthropic's are audited filings. CFO Sarah Friar told employees in August that OpenAI "will be a public company in 2027."

Why it matters: the trajectory is improving, with margin up 41 points in one quarter, but OpenAI is burning more than $10 billion a quarter while carrying the largest compute commitments in the industry. Those commitments sit on the books of Microsoft, Oracle, CoreWeave and others. Public investors will now price OpenAI against a listed Anthropic, and a 2027 IPO will need either a much faster path to breakeven or a valuation that reflects the burn.

Anthropic's IPO Draws Multiple Times the Shares on Offer

• Bloomberg reports the offering is oversubscribed multiple times, driven by anchor-size orders

• The Financial Times reports bankers are weighing a range above $70 to $78, which could lift the valuation to $1.5 trillion or more

• Including the $26 billion private placement, Anthropic is seeking up to $90.4 billion

• Pricing is expected November 18, with Nasdaq trading under "ANT" the next day

• Why it matters: strong demand one day into the roadshow suggests the AI selloff did not dent institutional appetite

Demand built quickly. The offering covers about 801.4 million new shares and 23.6 million from existing holders, and indications of interest already exceed that several times, according to Yahoo Finance, citing Bloomberg. The FT, citing five people familiar with the matter, reported that underwriters led by Goldman Sachs and Morgan Stanley are considering a higher range, per Seeking Alpha. No revised range had been filed by Wednesday's close.

The top of the current range implies about $1.4 trillion fully diluted, below the roughly $2 trillion figure discussed earlier this year. Forbes notes third-quarter revenue of $16.96 billion rose 47% from the prior quarter, giving investors a fast-growing business with a near-breakeven operating line to underwrite.

Why it matters: a raised range would reset the valuation benchmark for every frontier lab and support private marks at OpenAI and others. It would also pull a large block of capital from megacap tech funds in the same week Nvidia faces a leadership crisis, which could add pressure on the names investors sell to make room. Watch for an amended filing before November 18.