CoreWeave's (CRWV.US) strong third-quarter results energized investor enthusiasm for the artificial intelligence (AI) trade and drove a tech stock rebound on Wednesday, but reports of a second extramarital affair involving NVIDIA (NVDA.US) CEO Jensen Huang, along with speculation that he could be removed by the board, have once again weighed on AI trading and technology stocks.

At the same time, investors are closely watching the upcoming earnings from Cerebras Systems (CBRS.US) and Applied Materials (AMAT.US), both scheduled for release after Thursday's U.S. market close, in search of fresh clues about chip demand that could revive the AI trade. As of the latest data, S&P 500 futures were down 0.44%, while Nasdaq 100 futures, heavily weighted toward technology stocks, fell 0.92%. NVIDIA dropped nearly 7% in after-hours trading, while other chip stocks showed mixed performance.

Nvidia Turmoil Continues to Escalate: Jensen Huang Could Face Removal

Three days after acknowledging an extramarital affair in a statement on November 8, Jensen Huang was reported to be involved in a second extramarital relationship, with the woman being a NVIDIA vice president who reported directly to him. Meanwhile, media reports citing people familiar with the matter indicated that NVIDIA's board is actively preparing to remove Huang, potentially convening a board meeting as early as November 12 to decide his fate, and has already partnered with external executive search firms to identify successors, considering the appointment of an interim CEO as a transition.

Just three days earlier, Huang had admitted "infidelity to his wife" and apologized in a statement. At that time, NVIDIA's board emphasized it was "full of confidence in him and his leadership team," and only engaged a Wall Street law firm for an independent investigation. Yet within just 72 hours, the investigation escalated into a succession plan. Some commentators believe NVIDIA may be able to weather this storm, but the process will be extremely difficult, and the probability of Huang being removed as CEO is quite high.

Data from prediction market Polymarket shows that market bets on Huang's departure or removal have surged. Currently, the probability of Huang leaving before November 30, 2026, has risen to 86%, before December 31, 2026, to 91%, before March 31, 2027, to 92%, and before December 31, 2027, to 93%. With NVIDIA set to report third-quarter earnings next week, "key person risk" is weighing on investors. Fiona Cincotta, a senior analyst at Gain Capital, said that until the board's investigation results are announced, related uncertainty may continue to pressure NVIDIA's stock price, especially with the company's earnings report due later this month.

Investors Turn Attention to Cerebras and Applied Materials Earnings for Fresh Clues on Chip Demand

Despite the ongoing corporate governance turmoil at NVIDIA that continues to affect market sentiment and the AI trade, investors are still closely monitoring earnings from key companies in the AI supply chain, including Cerebras Systems, seen as an emerging competitor to NVIDIA, and chip manufacturing equipment maker Applied Materials. Both companies are scheduled to report earnings after Thursday's U.S. market close. Due to the impact of NVIDIA's turmoil, both stocks declined in after-hours trading.

Investors hope to find the latest clues about chip industry demand conditions from the earnings of Cerebras Systems and Applied Materials. According to Koyfin data, analysts expect Cerebras Systems third-quarter revenue to grow 28% year-over-year to $274.9 million, with an adjusted loss per share of $0.23. Applied Materials is expected to report fourth-quarter sales growth of 51% year-over-year to $10.3 billion, with adjusted earnings per share growth of 87% year-over-year to $4.05.

On the Stocktwits platform, retail investor sentiment ratings for Cerebras Systems shifted from "extremely bearish" to "bearish," while sentiment for Applied Materials rose from "bullish" to "extremely bullish." One user joked: "Cerebras just needs to say 'our CEO doesn't have an affair' at the start of the earnings call, and the stock will be back above $200." Another user said: "The Nvidia turmoil is bullish for Cerebras. With Nvidia taking a hit, I expect the market to rely more on Cerebras' software and chips."

For Cerebras Systems' third-quarter earnings, investors are focused not only on whether third-quarter revenue meets expectations, but more importantly on whether the company can convert its massive AI compute orders into actual revenue and whether previously promised margin improvements can be delivered on schedule. Cerebras Systems previously guided third-quarter core revenue at $214 million to $216 million, core gross margin at 38% to 40%, and core operating margin at negative 25% to negative 23%. Gross margin is particularly noteworthy. Cerebras Systems' second-quarter core gross margin had already declined from 46.5% in the first quarter to 40.6%, mainly due to higher operating costs from leased systems. Management previously expected the third quarter to mark the trough for gross margin, with improvement expected in the fourth quarter as lower-cost, company-owned compute systems come online, and a long-term target of above 60%. Therefore, investors will focus on whether third-quarter gross margin falls within the company's guidance range and whether management can provide a credible path to fourth-quarter improvement. If gross margin falls below expectations or management cannot confirm a fourth-quarter recovery trend, the market may re-examine the cost pressures behind the company's rapid expansion.

Orders and capacity are also core topics for the earnings call. Cerebras Systems' remaining performance obligations (RPO) reached $25.4 billion at the end of the second quarter. Management previously stated that market demand has exceeded the company's current available compute supply, with data center space and infrastructure deployment speed being important factors constraining revenue growth. The company also said that manufacturing capacity in 2026 is expected to expand to 10 times the previous level, with over 600 megawatts of compute capacity already operational or under contract. For investors, a massive order backlog certainly signals strong demand, but more importantly, whether the company can complete chip production, data center deployment, and customer delivery in a timely manner to convert orders into revenue and cash flow. If capacity expansion or data center construction progress falls short of expectations, revenue recognition could still be affected even if order volume remains strong.

More importantly, management previously projected that core revenue in 2027 would exceed three times that of 2026. This growth target is an important basis supporting its long-term valuation. Given that the company is still in a high-investment expansion phase, investors will closely watch whether management reaffirms this target and whether it provides a clearer timeline for capacity expansion, order delivery, and profitability improvement.

In contrast, Applied Materials' fourth-quarter earnings will provide investors with broader clues about the health of chip capital expenditure. As one of the world's leading semiconductor manufacturing equipment suppliers, the company's business covers key wafer fabrication areas including thin film deposition, chemical mechanical planarization, and inspection. Its orders and performance can reflect chipmakers' willingness to invest in advanced processes, memory chips, and advanced packaging.

Applied Materials previously estimated fourth-quarter revenue at approximately $10.25 billion, plus or minus $500 million, with non-GAAP earnings per share expected at $4.02, plus or minus $0.20. Since the company had already provided relatively strong guidance, market attention may not stop at whether fourth-quarter results meet expectations, but rather shift to next-quarter guidance and management's outlook for the 2027 semiconductor equipment market. In specific business areas, demand for DRAM and high-bandwidth memory (HBM) related equipment will be a key indicator for investors, and demand for advanced packaging and advanced-process logic chip equipment is also an important focus in the earnings report.

Profit margins and cash flow will also influence the market's assessment of Applied Materials' performance. As high-value-added advanced process, DRAM, and advanced packaging equipment account for a larger share of the business, investors hope to see the company maintain its ability to expand gross margins. Applied Materials has previously achieved 13 consecutive quarters of year-over-year gross margin growth and expects advanced packaging and other high-growth businesses to continue improving its product mix. If the company not only achieves revenue and profit growth but also maintains solid gross margin and cash flow performance, it would help reinforce market confidence in the long-term growth prospects of its AI equipment business.

It is worth noting that even though Applied Materials previously provided fourth-quarter guidance above market expectations, its stock still fell more than 5% in after-hours trading, reflecting that investor expectations for the semiconductor equipment industry are already quite high. Therefore, even if this earnings report beats expectations on revenue and earnings per share, it may not be enough to drive the stock higher. Next-quarter guidance and the 2027 wafer fabrication equipment market outlook may be more decisive for market reaction than single-quarter figures.

Overall, the two earnings reports from Cerebras Systems and Applied Materials will test the growth logic of the AI supply chain from two different dimensions. Cerebras Systems needs to demonstrate that its AI chips and inference services can build a sustainable business model outside of NVIDIA and convert its massive order backlog into revenue and profit. Applied Materials needs to prove that AI-driven investment in advanced logic, memory chips, and advanced packaging remains ongoing, bringing longer-cycle growth opportunities to the semiconductor equipment industry.

Against the backdrop of heightened market uncertainty caused by NVIDIA's corporate governance turmoil, if Cerebras Systems can deliver strong signals on order fulfillment and margin improvement, while Applied Materials remains optimistic about AI-related equipment demand and the 2027 capital expenditure outlook, it could help ease investor concerns about the growth prospects of the AI supply chain. Conversely, if Cerebras Systems' capacity delivery and profitability improvement fall short of expectations, or if Applied Materials signals slowing customer capital expenditure and pressured order growth, market doubts about AI investment returns and industry valuations could intensify further, dragging down the AI sector and technology stocks amid the ongoing NVIDIA turmoil.