Nvidia shares rebound as CEO Jensen Huang faces investigation over alleged affair

Stock movement

Nvidia shares rose 3% on Wednesday after falling for two days amid reports about CEO Jensen Huang’s affair. Shares closed down 5.47% on Tuesday as more details were revealed about the impact of CEO Jensen Huang’s affair with an alleged Chinese spy. They fell 4.3% Monday.

Investigation and board response

On Tuesday, Nvidia announced it had hired law firm Wachtell, Lipton, Rosen & Katz to investigate whether company secrets or national security were compromised. The board said it had no reason to believe that US national security or trade secrets had been compromised and expressed confidence in Huang and his leadership team.

Huang admitted to being unfaithful to his wife in a message sent to Nvidia employees on November 8. He apologised to his family, colleagues and shareholders and accepted responsibility for his actions. He also said he would cooperate fully with the independent investigation announced by Nvidia’s board.

The inquiry will examine reports that Huang was targeted by a foreign intelligence operation. A committee of independent directors, supported by outside legal counsel, will oversee the investigation.

Analyst and political reaction

In a note, Bank of America said it saw three scenarios with differing investment outcomes. In one scenario, the impact is contained with leadership continuity, and in another, prolonged uncertainty pressures valuation before earnings. In the final scenario, the impact is escalated, with “adverse findings, leadership disruption or tighter restrictions requiring earnings reassessment,” BofA research analyst Vivek Arya said in the note.

Morgan Stanley removed Nvidia as a top pick after shares dropped more than 25% since it was named on the list on Oct. 2. Huang’s leadership is “crucial” to the company’s strategic direction, analysts said in a Wednesday note.

US President Donald Trump addressed the controversy on Sunday, saying he had not discussed the allegations with Huang while expressing confidence in the Nvidia chief executive. Speaking to reporters on Sunday, Trump praised Huang as an “honorable” person and credited his “amazing” contributions to the US, while saying he had not discussed the controversy with the Nvidia CEO.

Billionaire investor Bill Ackman, founder of Pershing Square Capital Management, said on X that the Nvidia CEO was an “incredible human,” but added that if “indeed this is more than an affair, then it is obviously a real problem.” “I am hoping for a simple affair, not a risk to our national security,” he added.

Tesla CEO Elon Musk also weighed in, commenting “I agree” on a post by Sequoia partner Shaun Maguire. The post said Huang “did something incredibly dumb” that was “bad for America” but added that “Jensen is irreplaceable for America's AI leadership.”

China response and upcoming dates

China’s Foreign Ministry rejected the espionage claims. “The ‘Chinese spy’ allegation is purely unsubstantiated and directed at smearing China,” Chinese foreign ministry spokesman Guo Jiakun told a regular press briefing.

Nvidia is scheduled to report its third-quarter earnings on November 17. The chairs of three US House committees have asked Huang to brief them behind closed doors on November 18.

Sources

• cnbc.com: Nvidia stock rises as CEO Huang faces scrutiny over affair
• scmp.com: Nvidia faces defining test as Jensen Huang probe adds to chip stock turbulence | South China Morning Post
• economictimes.indiatimes.com: NVDA stock price today: Nvidia shares slide 5% after Jensen Huang’s affair admission as China spy probe puts AI giant’s leadership under scrutiny – Can it survive the CEO crisis? - The Economic Times
• profit.pakistantoday.com.pk: Nvidia shares plunge 6% amid CEO foreign intelligence contro - Profit by Pakistan Today
• livemint.com: Nvidia shares drop nearly 6% in pre-market as alleged China spy links put Jensen Huang under board scrutiny | Stock Market News

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.