Jensen Huang's affair rattles Nvidia stock: Shares drop nearly 4% in overnight trading

Nvidia Corp. shares dropped after the company’s board launched an investigation into Chief Executive Officer Jensen Huang, following his admission of an affair with a woman identified in a series of reports as a suspected Chinese spy.

The stock was down about 3.7% on Robinhood’s trading platform Sunday night New York time. The revelation threatens Friday’s tentative rebound in the bellwether artificial intelligence chipmaker following a steep selloff on concerns over financing for Big Tech spending and the impact of US midterm elections.

The new crisis started over the weekend, after Huang admitted in an internal staff memo that he was unfaithful to his wife and apologized to employees, prompting the firm’s board of directors to act. Their probe follows reports that Nvidia’s leader had been targeted by former Megaspeed International executive Alice Huang, who is suspected of spying for China by US intelligence agencies.

President Donald Trump called the Nvidia CEO a “fine person,” and said he should stay on as leader of the chipmaker. Nvidia’s board said it has “no reason to believe” that either national security or the company’s secrets were compromised.

Nvidia’s stock is down about 22% from its October high. The internal inquiry casts a rare cloud of leadership uncertainty over the company, just nine days before it’s scheduled to report quarterly earnings on Nov. 18.

While Nvidia’s core business is expected to remain strong, analysts warned that any distraction at the top could create an overhang for the stock that has been the anchor of the global AI trades.

ANALYST COMMENTARY

Josh Gilbert, eToro

• A cloud over Huang “is a cloud over the stock”
• The news arrives “at a time when investors are already questioning valuations and the pace of AI spending”
• “Any doubt over his position is going to matter to shareholders. The board has backed Huang, but the investigation is still ahead of us, and until there is more clarity, investors will have to account for the possibility that its findings lead to further questions”

Tim Waterer, KCM Trade

• “The allegations have naturally unsettled Nvidia’s share price in the short term – any CEO under internal investigation creates a period of uncertainty that the market has to price”
• “That said, Trump’s public endorsement of Jensen Huang, combined with the view that underlying demand for AI hardware across the industry remains intact, is helping the broader tech complex absorb the news”
• “It’s still a clear black eye for both the company and its CEO, but so far the damage looks contained rather than systemic”

Anna Wu, Floodlines Research

• “I don’t think this adds much to what we already know about Jensen Huang’s close ties with the mainland”
• “The market will trade it as a headline risk, and it can knock the price a little, like it did when the story first broke”
• “But I don’t see it as a market mover. The bigger drivers for Nvidia right now are the post-midterm chip selloff and earnings on November 17”

Adam Crisafulli, Vital Knowledge

• “If his role at Nvidia were compromised, that would obviously be a setback for the company”
• “More significant though is the risk to the company’s top line should the government implement more strict controls on sales of its chips to foreign buyers”
• “While Nvidia’s direct sales to China are minuscule, there is a view that in reality a fair amount of its products, including the most sophisticated ones, surreptitiously make it into the hands of Chinese users”

Mike O’Rourke, Jonestrading

• “These allegations are coming from an administration to which Jensen Huang is remarkably close”
• “If it is determined that Megaspeed’s Huang received preferential treatment from Nvidia, things get messy”
• “Nvidia’s track record on GPU export controls is beginning to look abysmal”