Key Notes
- Nvidia fell more than 6% in early US trading Monday, with AP reporting an 8% opening drop and a separate 6.3% intraday reading.
- Huang admitted infidelity, while independent directors are reviewing allegations that he was targeted by foreign intelligence.
- The board expressed confidence in Huang and said it had no reason to believe Nvidia secrets or national security were compromised.
Nvidia (Nasdaq: NVDA) fell more than 6% in early US trading Monday after chief executive Jensen Huang admitted infidelity and the chipmaker opened an independent investigation into reports that he was targeted by foreign intelligence.
The Associated Press reported an 8% drop at the opening bell. A separate early-session market update put the decline at 6.3%, showing the shares recovering some ground while remaining sharply lower. Those readings describe intraday trading, rather than a closing result.
The regular-session selloff extended the overnight weakness as investors assessed the implications of an investigation involving the executive who co-founded Nvidia and has led it throughout the AI boom.
NVDA Falls While Wall Street Rebounds
Nvidia’s decline stood apart from the broader market. In AP’s early-session update, the S&P 500 was up 1.1%, the Nasdaq Composite gained 1.4% and the Dow rose 606 points, or 1.2%, as of 9:35 a.m. Eastern time.
Huang’s future adds a leadership question to the stock’s financial outlook. Dan Ives of Yorkville Ives & Co. said his removal or departure was a small risk, while emphasizing how closely Nvidia’s AI strategy depends on him, according to AP’s report on the opening decline.
Huang Apologizes as Directors Open a Review
“I was unfaithful to my wife,” Huang wrote in a letter to employees published Sunday. He apologized to his family and colleagues, accepted responsibility and said he remained committed to leading Nvidia.
His letter did not name the woman or establish whether espionage occurred. He said he supported the investigation and would cooperate fully with it.
The company’s board statement assigns the review to a committee of independent directors assisted by independent outside counsel. Directors expressed confidence in Huang and his leadership team, while saying they had no reason to believe national security or Nvidia secrets had been compromised.
That assurance was issued at the start of the independent investigation. The board said it would examine all available information and provide further updates as appropriate; it did not set a completion date.
China Rejects the Espionage Claims
China’s Foreign Ministry denied the allegations Monday. Spokesperson Guo Jiakun described the claim that Huang had been targeted by a Chinese spy as unsubstantiated and a smear against Beijing.
The New York Times reported that US intelligence had determined that the woman was gathering information for China, according to AP. Huang’s admission of an affair does not confirm that intelligence allegation or establish that he knew of any spying.
November Earnings Keep the Business in Focus
The governance dispute arrives ahead of Nvidia’s next financial report. In its August earnings release, the company reported quarterly revenue of $96.2 billion, up 106% from a year earlier, and forecast third-quarter revenue of $108 billion, plus or minus 2%.
That forecast assumed no Data Center compute revenue from China. Sunday’s board statement did not include a new financial outlook.
Nvidia is scheduled to report results for the quarter ended October 25 on November 17, with an earnings call at 5 p.m. Eastern time.
