Nvidia's CEO Exit Collides With Prepayment Deals and Record AI Revenue

The week in one line — A governance crisis at the centre of the semiconductor industry met the strongest commercial validation AI software and cloud infrastructure have shown all year. Jensen Huang resigned as chief executive of Nvidia ($NVDA) over a national security scandal, testing whether rival chipmakers gain from its turmoil or suffer from the regulatory fallout. At the same time, OpenAI's $10 billion quarter and a shift toward customer prepayments at specialist cloud builders showed that demand is still generating cash, even as 10-year Treasury yields climbed 29 basis points to 5.15%.

The thread

For four days, a boardroom inquiry at Nvidia grew into a national security crisis that unsettled the entire semiconductor sector. What began on Monday as a board probe into chief executive Jensen Huang — as we covered in Tuesday's brief — ended on Thursday with his resignation after he admitted to an affair with a woman reportedly deemed a Chinese spy (per CNBC). Nvidia shares fell 4.3% on Monday and 5.5% on Tuesday as the scrutiny deepened. At first, investors treated Nvidia's trouble as a windfall for its direct competitors (per CNBC). Advanced Micro Devices ($AMD) rose 13.3% on Monday and another 5.9% on Thursday, while Broadcom ($AVGO) gained 3.9% on Tuesday and 5.5% on Thursday. By Friday, the implications looked far wider. New research indicated that China's most advanced AI models were trained on export-banned Nvidia chips (per TechCrunch), Democratic lawmakers launched a second congressional investigation into the company's China sales (per TechCrunch), and Commerce Secretary Howard Lutnick agreed to testify before the Senate Banking Committee amid questions from Treasury Secretary Scott Bessent over chip leakage (per CNBC). AMD gave back 8.8% on Friday as Wall Street reconsidered what a post-Huang regulatory regime means for all chipmakers (per MarketWatch). The week proved that Nvidia is not merely a competitor in the AI build-out, but the lynchpin of its financing, open-source software commitments, and export compliance (per CNBC).

Away from the chipmakers, the week's second thread tested how the physical build-out is paid for when interest rates rise. October consumer prices rose 0.4%, hotter than expected (per CNBC), helping push the 10-year Treasury yield up 29 basis points over the week to 5.15%. By our dashboard, hyperscaler capital spending is running 107.6% above last year — 2.22 standard deviations above its 10-year average, a phase we label saturation — while headline CPI sits at 4.1% year-over-year. In that tighter credit environment, specialist cloud builders tried to shift the burden of funding from bond markets onto their customers. On Tuesday, CoreWeave ($CRWV) reported higher third-quarter revenue, raised its guidance, and disclosed $9 billion in planned customer prepayments, sparking a 24.7% rally on Wednesday that briefly lifted peer Nebius Group ($NBIS) by 15.4%, as we noted in Thursday's brief. Yet when Nebius laid out its own $40 billion spending plan on Thursday — also relying on customer prepayments and loans while facing delays at a Microsoft ($MSFT) data centre (per TechCrunch), and as Nvidia-backed Nscale disclosed widening losses in an updated IPO filing (per CNBC) — investors baulked. Nebius fell 16.8% on Thursday and 9.9% on Friday, while CoreWeave gave back 6.9% on Thursday. Prepayments can ease immediate debt pressures, but only when the underlying data centres are delivered on schedule.

The third thread showed why companies are still trying to build that capacity: top-line AI revenue is growing fast while the cost of running models keeps falling. On Wednesday, reports showed OpenAI's quarterly revenue crossed $10 billion for the first time, up nearly 50% from $6.7 billion in the second quarter. That figure directly challenged the bear case that AI capital spending is outrunning its commercial returns. At the same time, model competition continued to drive down the cost of inference — the computing work of running a trained model. Following cheaper agent models from Meta Platforms ($META) earlier in the week, which we covered in Wednesday's brief, Alphabet ($GOOGL) released Gemini 4 Hydrogen on Thursday, a lower-cost model that it reported outscores its flagship Gemini 4 Argon on an independent intelligence index, as we detailed in Friday's brief. Cheaper, smarter models help software vendors build profitable applications. Meanwhile, the long-term push to power those models advanced on Friday as Centrus and Oklo finalised fuel deals for up to five reactors at a 1.2-gigawatt Meta campus in Ohio. Demand for AI is real.

Who moved

Nebius dominated the daily boards, appearing in four of the week's five sessions and illustrating the whip-saw in cloud infrastructure financing: down 5.3% on Tuesday, up 15.4% on Wednesday alongside CoreWeave's 24.7% jump, and then down 16.8% on Thursday and 9.9% on Friday after unveiling its $40 billion capital plan. Semiconductor stocks were nearly as active. AMD and sensor maker Aeva Technologies ($AEVA) each appeared three times, rallying on Monday (up 13.3% and 11.8%, respectively) before sliding on Friday (down 8.8% and 10.3%). Monday's session also brought single-day surges in optical and connectivity suppliers Coherent ($COHR), up 16.8%, and Astera Labs ($ALAB), up 13.7%, while Sandisk ($SNDK) jumped 13.7% on Wednesday. Super Micro Computer ($SMCI), which carries warning language in its filings, fell 11.3% on Thursday; nothing in that day's coverage explained the specific drop, leaving its upcoming financial disclosures as the key test. Power supplier Bloom Energy ($BE) posted two double-digit gains, rising 11.9% on Monday and 13.0% on Wednesday. In our research universe this week, Credo Technology ($CRDO) moved off the list of companies cheap against their own past, while robotic surgery maker Intuitive Surgical ($ISRG) joined it.

Despite the single-stock turbulence and a 29-basis-point jump in the 10-year Treasury yield, the major equity benchmarks finished the five-session week higher. The S&P 500 ETF ($SPY) gained 2.6% to 754.37, trading in a range between 735.29 and 759.81, while the Nasdaq 100 ETF ($QQQ) rose 3.6% to 679.89 and the Nasdaq Composite added 2.3% to 25,136.27. The Semiconductor ETF ($SMH) still led the sector funds, up 4.9% to 486.75, though its wide weekly range from 463.96 to 506.96 reflected Friday's reversal. The Technology Sector ETF ($XLK) rose 3.4% and the Software ETF ($IGV) gained 2.3%. Volatility cooled significantly, with the $VIX falling 24.7% over the week to close at 19.30, while gold futures fell 4.6% to 3,886.30 as the US Dollar Index rose 1.1%. Equities absorbed the rate shock.

What changed

The week's evidence forced a reassessment of three narratives we track across our themes. First, the case that AI spending is outrunning its returns weakened materially: OpenAI's jump from $6.7 billion to over $10 billion in quarterly revenue joins Anthropic's recently disclosed $17 billion quarter in showing that model makers are generating substantial revenue, even if cloud builders still face cash burn. Second, our view on neocloud financing became more nuanced. After Wednesday's session, CoreWeave's $9 billion in customer prepayments looked like a clean blueprint to bypass tight bond markets; by Friday, Nebius's two-day selloff showed that investors will not reward prepayment plans when construction delays and $40 billion price tags are attached.

Third, the AI Software & Agents theme gained clear support. Google's release of Gemini 4 Hydrogen confirmed that inference prices are falling while capability rises, a direct tailwind for software vendors like Salesforce ($CRM), ServiceNow ($NOW), and Adobe ($ADBE), all three of which currently sit cheap against their own valuation history on our readings. Conversely, the AI Compute Build-out theme now faces a governance and policy test that did not exist a week ago. What looked mid-week like a simple rotation from Nvidia into AMD and Broadcom turned by Friday into a broader question about export enforcement and Nvidia's role as an industry backstop. Software's thesis got cleaner while hardware's got harder.

The week ahead

• Nvidia ($NVDA) earnings (scheduled for Tuesday, 17 November, after the close): Following Jensen Huang's resignation, the company's first report without its co-founder will test the AI Compute Build-out theme. Watch for interim leadership's commentary on the board's probe, any disruption to hyperscaler orders or its $12.9 billion Hugging Face acquisition (per TechCrunch), and exposure to tighter China export rules.
• Senate Banking Committee testimony and China export probes: Commerce Secretary Howard Lutnick has agreed to testify before the Senate Banking Committee regarding China chip sales (per CNBC), while a second congressional probe gets underway. Any move toward stricter export licensing would weigh on the entire semiconductor group.
• Palo Alto Networks ($PANW) earnings (scheduled for Wednesday, 18 November, after the close): Rides our AI Software & Agents theme. Investors will look at billings and revenue growth to see whether enterprise security spending and AI-driven software adoption are holding up without compressing margins.
• Intuit ($INTU) earnings (scheduled for Thursday, 19 November, after the close): Currently sitting cheap against its own past in a neutral context on our readings, its results will show whether small-business and consumer software pricing power is intact as cheaper AI models proliferate.

Each report will test whether software can take the baton from hardware.