Should You Buy Nvidia Stock Now That Jensen Huang Has Resigned? Here’s What I’m Doing.

Nvidia (NASDAQ:NVDA) has had a tumultuous few days. News broke that CEO Jensen Huang had an affair with someone who is an alleged Chinese spy. That's a major problem considering how vehemently the U.S. government has fought to keep Nvidia's cutting-edge technology out of China's hands.

This has caused Nvidia’s stock to sell off over the past few days, compounding the fact that it was already declining before this story broke. The reality is that the broader stock market believes AI spending has gone too far and is no longer willing to fully value companies in this sector.

With some other relationships coming to light and Huang resigning on Nov. 12, Nvidia is entering a new paradigm.

Those are two negative forces working against Nvidia stock, which is why it's down 30% from its all-time high. The question is, should you sit this one out or buy more? Here's what I'm doing.

Nvidia CEO Jensen Huang. Image source: Getty Images.

What has changed with Nvidia's business?

The biggest question investors must ask themselves is whether anything has changed inside Nvidia's business. I think the answer to that is no.

The AI build-out is still going strong, and several AI hyperscalers have already indicated that 2027's build-out costs will be greater than in 2026. In fact, Nvidia gave guidance that it expects data center capital expenditures by the big five AI hyperscalers to reach $1.3 trillion in 2027, up from nearly $800 billion in 2026. This is projected to lead to 70% revenue growth next year, which is far faster than the market is currently pricing into the stock.

The biggest question is what Nvidia will look like without Huang. If the board can identify a suitable long-term replacement, then there's nothing to worry about. However, if the company faces some government-led investigations about what's going on with its business in China through intermediaries, this could be a huge problem for Nvidia.

Furthermore, future product development could be an issue, as Huang is viewed as a visionary in his field. There are still many key pieces within the Nvidia organization that can keep the ship on course.

I still think the company is in a great position to dominate regardless of who is in the leadership position, but not anyone can run Nvidia. While CFO Colette Kress is taking over as interim CEO, investors should be wary only if she's named the full-time replacement. CEOs with finance backgrounds have harmed many tech companies; just look at what happened with Intel and IBM. If Nvidia's board doesn't learn that lesson, its future could be in jeopardy.

However, I have faith that the board will make the right decision. With the most recent sell-off, now is also one of the best times in recent memory to buy the stock.

Nvidia stock is cheap

After the sell-off, Nvidia trades for just 21 times earnings.

NVDA PE Ratio data by YCharts

That's significant because it now prices Nvidia at a cheaper level than the S&P 500, which trades at 22.4 times earnings. That's an amazing stat, especially considering that Nvidia's growth is expected to be 70% next year.

When next year's earnings projections are used to price the stock, it trades for just 10.6 times next year's earnings. That's just an absurdly low price tag for a company positioned to capitalize on the AI build-out, regardless of who leads it.

As a result, I think Nvidia is still a strong buy today. With how cheap the stock has gotten due to the sell-off, there are few better options available in the stock market than Nvidia. While it may take a bit for the stock to regain its swagger, I think it will come with time. There have been many companies that have recovered from failures or scandals, and I believe that Nvidia will be among them in the next few months.

Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Intel, International Business Machines, and Nvidia. The Motley Fool has a disclosure policy.