Nvidia stock falls after Jensen Huang resigns: Will NVDA crash further or rebound? Here's what happened to Intel, HP, McDonald's and Wynn after their CEOs left

Nvidia stock fell about 10% on Thursday after Jensen Huang resigned as CEO and this has put focus on how investors react when a company's chief executive leaves unexpectedly. While AMD and Broadcom shares gained, several companies connected to Nvidia's AI business moved lower. Past CEO departures at Intel, McDonald's, HP and Wynn Resorts show that the initial market reaction does not always reflect how a stock will perform over the following year.

Nvidia stock (NVDA) dragged other AI stocks lower after Jensen Huang resigned

Nvidia was down 7.80% in overnight trading early Thursday. The board appointed CFO Colette Kress as interim CEO and began searching for a permanent successor after Huang's 33 years at the company.

AMD shares rose more than 3%, while Broadcom also edged higher. However, Nvidia-backed CoreWeave fell 14% in premarket trading and rival Nebius dropped 20%. TSMC, which manufactures Nvidia chips, declined more than 4%. ASML also slipped, while Sandisk fell 5%. Micron Technology and SK Hynix lost roughly 4%, and Intel dropped 4%.

Intel and McDonald's show different stock reactions after CEO departures

Intel shares fell 2.4% on June 21, 2018, when Brian Krzanich resigned. The company appointed its finance chief as interim CEO and began searching for a permanent replacement. Over the next 12 months, Intel stock lost 11.7%, while the S&P 500 gained 6.8%.

McDonald's had a different experience after it fired Steve Easterbrook in November 2019 over a relationship with an employee that violated company policy. Shares fell 2.7% in the first session after his departure, but the company named US president Chris Kempczinski as his replacement in the same announcement.

McDonald's stock gained 9.6% over the following year, compared with a 7.9% rise in the S&P 500, as per Beincrypto.

HP and Wynn shares struggled after leadership changes

Hewlett-Packard shares had dropped 8% after Mark Hurd resigned in August 2010. The board took almost two months to name a successor, who was then fired within a year. HP stock fell 29.5% over the following 12 months, while the S&P 500 gained 6.9%.

While Wynn Resorts had a different immediate reaction. Founder Steve Wynn resigned in February 2018 following misconduct allegations and president Matt Maddox took over straight away. Wynn shares rose 8.6% on the day of his departure after falling 18.6% while his future was uncertain. However, the stock remained down 19.5% a year later, while the S&P 500 gained 1.4%.

Will Nvidia stock go back up: Nvidia's succession decision remains key for investors

Nvidia's board has appointed Kress as interim CEO but it has yet to announce a permanent successor.

Gene Munster of Deepwater told CNBC that a founder-led company without a clear second-in-command risks a 20% correction. Seaport analyst Jay Goldberg described a decline of that size as a possible near-term shock, according to Beincrypto.

Nvidia shares have gained about 267% over the past three years. A 2021 study by Paul Farah and Hui Li, which examined 187 forced CEO departures at S&P 1500 companies, found negative abnormal returns over the following three years when the departing CEO had outperformed.

The comparisons are not a direct forecast for Nvidia. The four examples represent a small sample, and none involved a company of Nvidia's size.