Nvidia shares fell sharply on Monday, dropping as much as 8.8 percent shortly after the opening bell before recovering to close down about 4.3 percent — a slide that erased roughly US$192 billion from the chipmaker’s market value on a day when the rest of Wall Street rallied.
The fall followed the company’s confirmation that its board has opened an independent investigation into whether chief executive Jensen Huang was the “target of a foreign intelligence effort,” and Huang’s own admission of an extramarital affair. LankaNewz reported the board inquiry on Sunday.
Nvidia moved against the market
The broader market went the other way. The S&P 500 rose 2.35 percent and had its best day since April, while the Nasdaq Composite gained 2.7 percent for its best day since July, CNN reported. Both indices were rebounding from a steep sell-off the previous week.
Al Jazeera, reporting from early trading, recorded the Dow Jones Industrial Average up 1.7 percent and the S&P 500 up 2.1 percent at that stage, with Microsoft up 2.2 percent, Amazon up 3.8 percent and AMD trading more than 10 percent higher on a new deal with Google and an analyst upgrade, according to Al Jazeera.
Nvidia is now down 25 percent from its peak a month ago, and erased its gains for the year during the previous week. The Nasdaq closed in correction territory on Thursday, more than 10 percent below its own one-month peak, before recovering some ground on Friday and Monday.
Analysts doubt a leadership change
Al Jazeera reported that Huang is Nvidia’s fifth-largest shareholder with 3.6 percent of the company, according to LSEG data, but — unlike executives at Meta or SpaceX — does not hold majority voting control.
“Founder-led companies outperform because one person carries the vision,” Michael Monaghan, portfolio manager of the Founders 100 ETF, told Al Jazeera, calling Huang’s removal “highly improbable” on current information.
Analysts at Citi wrote that the key questions for investors are whether the board’s inquiry uncovers anything more serious, and whether there are regulatory consequences that could constrain sales.
Beijing rejects the spying claim
The inquiry follows reporting that Huang had a relationship with Alice Huang — no relation — a former executive at the Singapore-based data centre and cloud computing firm Megaspeed, which describes itself on its website as “a core business partner of NVIDIA’s computing power cloud business in the Asia-Pacific region.”
Chinese Foreign Ministry spokesperson Guo Jiakun rejected the allegations. “The so-called Chinese spy narrative is purely a groundless accusation, slander, and a smear,” he told reporters in Beijing.
Nvidia’s board has said it has “no reason to believe that either national security or NVIDIA secrets were compromised.”
Wider pressure on AI stocks
The sell-off lands during a nervous stretch for AI investors. Al Jazeera noted that after the US midterm elections, candidates running on anti-AI platforms won heavily, giving Democrats — more critical of the industry than Republicans — control of both chambers of the new Congress. Tech stocks had already fallen in recent weeks on concerns about the sustainability of the data centre buildout and demands for clearer returns on AI spending.
A note on the figures
Reports filed at different points in Monday’s session carry different numbers, and they are not in conflict. Al Jazeera, writing near the open, recorded a fall of “over 4 percent”; Hiru News, filing in the Colombo evening while US trading was still under way, reported about 7 percent. The intraday low was 8.8 percent and the closing fall about 4.3 percent. The closing figure is the day’s result.
Nvidia’s market capitalisation stood at about US$4.5 trillion. Neither Alice Huang nor Jensen Huang has been charged, and no court or regulator has made a finding in the matter.