Nvidia stock falls nearly 10% as CEO Jensen Huang announces resignation

Nvidia shares plunged nearly 10% on Thursday, sending the company’s value below $4 trillion in market cap after Jensen Huang announced he would immediately step down as CEO and a member of the board at the chipmaker.

Chief Financial Officer Colette Kress will serve as interim CEO until a new leader is appointed, Nvidia said in a Thursday statement. Harvey C. Jones, former CEO of Synopsys, will become the first-ever chair of the board.

On Sunday, Huang admitted to having an affair. The CEO was romantically involved with Alice Huang, an executive at cloud company Megaspeed, according to The Financial Times, who U.S. intelligence officials believe is a spy for China.

The New York Times on Wednesday reported that Huang had another extramarital relationship with Kimberly Powell, vice president of health care at Nvidia. Powell reports to Huang, according to the Times.

Before Huang resigned, several Wall Street analysts told CNBC that this departure could lead the stock to fall 20%, given how critical he has been to Nvidia’s success. Nvidia’s stock is already down more than 20% over the last month.

Bernstein on Thursday slashed its price target on Nvidia’s stock by half from $400 to $200.

Stacy Rasgon, a senior analyst at Bernstein, told CNBC’s “Squawk Box Asia” on Thursday that Huang’s alleged affair with a direct report means it is “much tougher for the board to leave him in position.”