2 Hedge Fund Managers Want Jensen Huang Back. Could He Return as Nvidia CEO?

Jensen Huang’s departure has shocked the business world and left Nvidia (NVDA -2.01%) investors wondering what happens next.

Shares of the AI chip leader tumbled 15% last week as the drama unfolded around Huang, and are down a third from their peak in October.

However, over a longer time frame, Nvidia has been one of the greatest engines of wealth creation in human history. Prior to the recent slide, Nvidia had added roughly $5 trillion in market value over the last decade, and its investors don’t want to see that continue to erode.

Now, two prominent hedge fund managers, Brad Gerstner of Altimeter Capital and Gavin Baker of Atreides Management, are calling for the board to consider bringing back Huang.

In a letter to the board, the two investors asked the directors “to pursue a slow, measured, and deliberate process regarding the future of Nvidia that leaves all options on the table, including the potential return of Jensen Huang.” They added, “The Founder and longtime incredible leader of this extraordinary company has earned the right for a deliberate process that avoids any needless rush to replace him before all the facts are known.”

Could Jensen return as CEO?

In addition to that letter, an open petition that calls for him to be reinstated has received more than 80,000 signatures, and hundreds of Nvidia employees have signed a letter calling for Huang to be brought back. Clearly, there’s a strong interest in his return.

This call comes at the same time that the federal government said that it has not determined that Alice Huang, the Megaspeed executive with whom Jensen Huang had an affair, is a spy. In other words, she was not directly employed by Beijing and may instead have been an “asset,” someone who could have passed along information to Chinese intelligence.

It could take months and multiple investigations to determine if Jensen Huang or Nvidia broke any laws or what, if anything, may have been leaked to Alice Huang.

At minimum, for Huang to return, there would need to be a full exoneration by the federal government over the chip export ordeal, and that will take time. Jensen has agreed to testify before Congress.

Nvidia announced Huang’s resignation Thursday morning after meeting the night before to reportedly oust him, and it’s not clear if Huang willingly agreed to walk away in the end, or if he was pushed out.

According to Bloomberg, Huang seemed to express remorse before he resigned, saying, “I’m a piece of sh–.” The episode has been humiliating for him, and the resignation may have come to avoid more dirty laundry being aired in the media. After the resignation, Reuters reported a third affair with an unnamed employee, and there could be more.

In other words, it’s unclear if Huang wants his job back right now.

What it means for Nvidia investors

At this point, Huang’s return seems like a long shot and is not a reason to buy the stock. Bringing him back could lead to further chaos at the company, especially while Nvidia is being investigated by regulators.

The calls could grow louder, though, depending on how the company performs without him, and if enough shareholders want him back, they could install a new board to do so.

Rather than indulging in that drama, investors are better off focusing on the facts on the ground and what they mean for the future of Nvidia. We’ll get more insights when the company reports third-quarter earnings on Tuesday during the earnings call. How CFO and interim CEO Colette Kress handles the call and what information she shares should help signal where the company goes from here. The only thing that’s certain for Nvidia is there’s plenty of uncertainty ahead.