Nvidia shares slide as its board investigates Jensen Huang

In 30 seconds

• Nvidia shares fell 4.27% on Monday and were down as much as 6.25% on Tuesday.
• The board opened an independent investigation into Jensen Huang after reports of a possible foreign intelligence effort.
• Shareholders filed a class action; Beijing denies the allegations.

Nvidia, the company whose chips underpin much of the artificial intelligence boom, is on its second straight day of steep losses on Wall Street. The trigger is not its business but its founder: the board of directors opened an independent investigation into Jensen Huang after reports that the CEO was the target of a foreign intelligence effort.

What happened to the stock

Monday, Nov 9−4.27%closed at $178.67

Tuesday, Nov 10−6.25%intraday low, near $167

From its peak≈ −31%from $243 to $167

On Monday, November 9, Nvidia shares closed down 4.27% at $178.67, according to CNBC and El Financiero, after falling as much as 8.8% during the session. The pressure continued on Tuesday: Infobae reports an intraday drop of up to 6.25%, with shares near $167, and a decline of about 10.5% over two sessions.

Fuente: CNBC, El Financiero and Infobae. The Nov 10 figure is intraday, not a close.

The hit was specific to Nvidia: on Monday, CNBC reports, AMD, Marvell, Broadcom and Intel all closed higher.

Why the board is investigating

The board’s review follows reports by The New York Times and the Financial Times that, citing US intelligence agencies, say Alice Huang — an executive at Megaspeed, a Singapore-based cloud company that does business with Nvidia — was passing information to Beijing. These are allegations attributed to those agencies; no authority has publicly proven them.

In an email to employees, Jensen Huang acknowledged an extramarital relationship and apologized. According to CNBC, the CEO fully supports the board’s review and has committed to cooperate.

China’s government rejected the allegations: Foreign Ministry spokesman Guo Jiakun said the so-called spy narrative is unfounded. President Donald Trump defended Huang and said he probably has an explanation.

1. Oct 29
   New York Times report

   US agencies say a Megaspeed executive passed information to Beijing.

2. Nov 8
   Nvidia announces an independent probe

   The board will review the reports; Huang says he supports it.

3. Nov 9
   Shares drop 4.27%

   Beijing rejects the allegations and Trump defends Huang.

4. Nov 10
   Second drop and a class action

   Rosen Law Firm sues Nvidia and Huang in San Jose, California.

5. Nov 17
   Third-quarter results

   The first big test since the scandal.

Shareholder lawsuit

Rosen Law Firm filed a class action against Nvidia and Huang in federal court in San Jose, California, according to Xataka, citing Reuters. The plaintiffs argue the company withheld material information about that relationship from investors. Other firms said they are also seeking affected investors.

What comes next

The board’s investigation has no announced completion date, and Nvidia reports quarterly results on November 17. Among analysts, Dan Ives of Yorkville Ives & Co. argues that talk of replacing Huang makes no sense and that Nvidia remains years ahead of its Chinese rivals.

”black eye moment”