Nvidia: The Scandal That Sent Its Stock Tumbling
Today, we're talking about something that… literally nobody saw coming.
Technology stocks rallied. Wall Street closed more than 2% higher, and in Asia, TSMC jumped nearly 5%.
And Nvidia? It fell.
And it wasn't because of earnings or sales.
It fell because of its own CEO. Jensen Huang admitted to having an extramarital affair with a woman whom US intelligence agencies consider to be a Chinese spy. And Nvidia's board has launched an investigation.
So what exactly happened, what's coming next, and what happened to the stock?
WHAT HUANG ADMITTED
On Sunday, Huang sent a memo to Nvidia employees. The company subsequently made it public.
His words were clear: "I was unfaithful to my wife. My actions hurt her and our children."
He went on to say: "There is no excuse for what I did. I am deeply sorry."
He also apologized to the people at the company. "I owe an apology to my family and to all of you," he wrote.
And he added something you don't include casually in a memo like this: "I love our country and our company."
He also said he was determined to protect Nvidia and support US national security.
"National security? In a memo about a personal matter?" you might be wondering.
Yes. Because this isn't just an ordinary personal scandal.
The memo didn't name the woman. However, according to The New York Times, Huang told the board that she was Alice Huang. Despite sharing the same last name, the two are not related.
WHO IS ALICE HUANG?
Alice Huang is an executive at Megaspeed, a data center company based in Singapore.
On October 29, The New York Times reported that US intelligence agencies had concluded she was a Chinese spy. Trump was reportedly briefed on the matter and, apparently, took no action.
According to Axios, concerns that she was passing information to China have emerged in at least three countries.
And this is where things get even more interesting.
Megaspeed isn't just some random company when it comes to Nvidia.
Its Malaysian subsidiary purchased at least $4.8 billion worth of AI equipment powered by Nvidia chips. The purchases took place between June 2024 and February 2026.
In 2024, Megaspeed had already come under scrutiny from US authorities over possible attempts to circumvent export restrictions.
So what does all this mean?
Put simply, the concern is that Nvidia chips may have ended up somewhere they weren't supposed to: China.
Of course, there's another side to the story.
Nvidia says its own investigation found no evidence of any illegal diversion. On October 29, the company said the allegations had been "investigated and debunked."
Huang himself had previously said that his interactions with Megaspeed were "completely normal."
China has described the allegations as "baseless speculation."
And let's make one thing clear: no one has been formally charged.
WHAT HAPPENS NEXT?
Nvidia's board has launched an independent investigation.
It will be conducted by a committee of independent board members, working alongside external lawyers.
The board says it has no reason to believe that national security or company secrets were compromised. It has also expressed confidence in Jensen and his management team.
Huang supports the investigation and will cooperate.
And Nvidia's spokesperson was categorical: Huang will continue serving as CEO "without interruption."
So when will we get the findings?
Nobody knows. The board hasn't provided a timeline.
But that's not all.
Three Republican committee chairmen in the House of Representatives have asked Huang to brief them in a closed-door session on November 18.
And Democratic Senator Chris Coons was equally direct: "Congress will investigate and get answers."
Now pay attention to the timing.
On November 17, Nvidia is scheduled to report its quarterly earnings.
That means Huang will present the company's financial results, and the very next day he'll face Congress.
And as if that weren't enough, Nvidia has no publicly disclosed succession plan.
WHAT HAPPENED TO THE STOCK?
In premarket trading, Nvidia was down 4.4%.
That translated into approximately $199 billion in market value.
Yes, you read that correctly. Nearly $200 BILLION wiped out in just a few hours.
Huang himself lost $7.1 billion from his personal fortune.
During the trading session, the decline reached as much as 8%.
The stock eventually closed down 4.27%, at $178.67.
And all of this happened while the S&P 500 gained 2.35%.
The damage hadn't started today, either.
From the first reports through Friday, the stock had already lost 13%.
Before Friday's 2.8% rebound, Nvidia had fallen 9.3% and 3.2% in the two preceding sessions.
Dan Ives, one of the most bullish analysts on AI, described the situation as a "black eye moment" for Jensen.
He expects multiple investigations by Congress, at the very least.
He also says there is a "clear risk" that Huang could be forced out, depending on what the investigation uncovers. In the short term, however, he expects him to remain CEO.
Mohamed El-Erian put it in just two words: Key-man risk.
What's that?
Put simply, it's the risk of a company becoming excessively dependent on a single individual.
And in Nvidia's case, that individual is the CEO of a company worth more than $4 trillion.
One more thing worth mentioning.
At Friday's close, Nvidia had a forward P/E ratio of around 15. Its five-year average is 36.
That's a significant difference.
And it adds another layer to an already complicated situation.
