In the technology industry, there are few instances of a key visionary leader or founder being removed from their position in a relatively short period of time. However, there is one analog that we believe is potentially relevant in the current situation surrounding Nvidia – the extended leave of absence of Steve Jobs from Apple in January 2011 and his unfortunate passing in October 2011. Just as the market searched for the right multiple with which to price Apple’s equity during this time, we believe the same is likely to be the case for Nvidia until there is more clarity on the future leadership and business momentum of the company.

When Steve Jobs stepped down as CEO of Apple in January 2011, the company was facing a number of challenges, including increased competition in the smartphone market and declining sales of the iPhone. Despite his absence, Apple continued to innovate and push the boundaries of technology, releasing new products such as the iPad and iPhone 4S. However, the lack of a clear succession plan and the uncertainty surrounding Jobs’ health weighed on the stock price, causing it to trade at a significant discount to its historical multiple.

Similarly, Nvidia has faced a number of challenges in recent months, including increased competition in the graphics processing unit (GPU) market and declining sales of its gaming products. While the company has a strong track record of innovation and has made significant investments in emerging technologies such as artificial intelligence and autonomous driving, the lack of a clear succession plan and the uncertainty surrounding the future leadership and business momentum of the company are likely to weigh on the stock price in the medium term.

In both cases, the market was forced to grapple with the question of how to price the company’s equity in the absence of a clear visionary leader. While the outcome was ultimately positive for Apple, with the company’s stock price more than doubling in the two years following Jobs’ return, the process was not without its challenges. Similarly, we believe that the market will need time to adjust to the new reality of Nvidia’s leadership crisis, and that the stock price will likely trade at a discount until there is more clarity on the future of the company.