Nvidia stock (NASDAQ: NVDA) fell nearly 4% in overnight trading on Monday after the chipmaker announced an independent investigation into reports that chief executive Jensen Huang had been targeted by a foreign intelligence operation.
Shares traded around $178.81, down 4.1% from Friday’s Nasdaq close of $186.64.
The company said it had no reason to believe confidential information was compromised and reaffirmed its confidence in Huang. But with Nvidia already under pressure from an AI-stock selloff, the inquiry adds another uncertainty ahead of November 17 earnings.
Why is Nvidia stock falling?
Friday’s 2.78% rise had offered some relief following Thursday’s 9.26% plunge. The new overnight decline threatens that recovery and leaves Nvidia roughly 25% below its October high.
Investors had already grown wary of stretched semiconductor valuations and the enormous sums being borrowed to build AI data centres. Potentially tougher oversight of advanced technology and overseas chip sales has added to the pressure.
Huang’s importance makes the latest development particularly sensitive. He has led Nvidia’s transformation into the dominant supplier of AI processors and remains closely associated with its product strategy and relationships with customers.
“This boardroom storm has landed at a brutal time for the AI trade,” eToro analyst Josh Gilbert told Reuters on Monday.
He argued that the investigation could hurt sentiment but would become a more serious long-term problem if it threatened a change in leadership.
Jensen Huang investigation: What is the Nvidia CEO probe about?
Nvidia’s board said on Sunday that independent directors and outside lawyers would examine reports that Huang was targeted by a foreign intelligence effort. It has not announced any finding of espionage or wrongdoing involving company secrets.
The inquiry follows reports about Huang’s relationship with Alice Huang, a former executive at Singapore-based Megaspeed, a company that buys Nvidia chips.
US authorities reportedly investigated suspected Chinese intelligence links. Megaspeed faces separate scrutiny over restricted-chip exports.
In a message to employees, Jensen Huang acknowledged being unfaithful to his wife, apologised and promised to cooperate fully. The board said it had no reason to believe US national security or Nvidia information had been compromised.
Republican lawmakers requested a November 18 private briefing about Nvidia’s safeguards and the reported relationship.
Vital Knowledge analyst Adam Crisafulli said in comments reported by Bloomberg that stricter US export controls might pose a bigger revenue risk than the personal controversy, especially if authorities examined how advanced chips reach overseas buyers.
Nvidia stock price: Can earnings prevent a deeper selloff?
Nvidia’s underlying business remains exceptionally strong. Fiscal second-quarter revenue reached $96.2 billion, up 106% from a year earlier, while data-centre sales increased 117% to $89 billion.
Management previously forecast about $108 billion in third-quarter revenue. Results are scheduled for November 17, when investors will scrutinise orders from major cloud customers, profitability and whether AI infrastructure spending can sustain its extraordinary pace.
Floodlines Research analyst Anna Wu described the inquiry as “a headline risk” rather than an immediate fundamental threat. She considered the recent chip-stock correction and upcoming earnings more important drivers of the share price.
That view depends partly on the investigation finding no material security breach or disruption to leadership. Prolonged scrutiny could still increase governance concerns and make investors less comfortable paying a premium for Nvidia shares.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
The post Nvidia stock falls 4% after Jensen Huang probe: is a bigger crash coming? appeared first on Invezz