Independent Huang Probe Accompanies 5.5% Nvidia Stock Drop and Leadership Concerns
Key Facts
Nvidia shares fell about 5.5% at Tuesday's close on November 10, after dropping 4.3% in the previous session, as the board investigates reports that CEO Jensen Huang was targeted in a foreign intelligence effort. The Associated Press said Monday's losses wiped about $190 billion from the company's market value, while the stock remained under pressure on Tuesday. Reuters, in a report republished by Investing.com, said the stock was on track to lose more than $470 billion in value over two sessions. The report linked the decline to investor concerns about the case's implications, alongside other market and company factors. The stock closed at $168.89 on November 10, after reaching an intraday low of $165.89.
The investigation began after reports that Huang may have been targeted in a foreign intelligence operation. Nvidia's board confirmed that a committee of independent directors would oversee it with help from independent outside legal counsel. The independent directors appointed law firm Wachtell, Lipton, Rosen & Katz to conduct an investigation they described as "comprehensive and independent," the Associated Press reported. The board said it had no reason to believe national security or company secrets had been compromised. It added that the investigation would examine the available information and that Huang would remain in charge of the company during the process. The board said Huang was committed to cooperating and that it had confidence in him and the leadership team, pledging to provide updates as appropriate.
In a letter to Nvidia employees, Huang acknowledged that he had not been faithful to his wife and apologized to his family and colleagues, according to the Associated Press. Huang did not name the woman in the letter, and the agency did not establish that she was a spy, although the reports under investigation concern the possibility that he was targeted by intelligence operatives. President Donald Trump said the Federal Bureau of Investigation was investigating the relationship Huang acknowledged and apologized for. The matter thus brings together the board's investigation into security reports and separate U.S. investigations concerning broader issues involving China and semiconductors. The board, however, said the information available to it gave it no reason to believe company secrets or national security had been compromised.
The government inquiry includes a Justice Department investigation into whether Megaspeed violated export-control laws, according to the Associated Press. The agency said the investigation had moved from the Commerce Department to the Justice Department's National Security Division and includes Alice Huang. The published report gave no outcome for the investigation and made no finding that a violation had occurred, while Nvidia's board investigation remains a separate process focused on reports concerning Huang. These developments come as scrutiny intensifies over exports of AI chips to China, a sector in which Nvidia's role as a key supplier to AI developers is central. The board has not announced a timeline for completing its review, saying only that it would provide updates as appropriate.
Nvidia's market value exceeds $4 trillion, according to the Associated Press, and its chips, which supply AI developers, have made it one of Wall Street's largest companies by market capitalization. That scale puts the future of its leadership in investors' focus, particularly as Huang sits at the center of the decision-making structure and has more than 60 direct reports, according to the agency. The succession plan remains unclear; names discussed hypothetically in the event he leaves his post include co-founder Chris Malachowsky and Chief Financial Officer Colette Kress. Tim Ghriskey, chief portfolio strategist at Ingalls & Snyder, told Reuters there was concern about who might succeed Huang, but described the company as strong and said: "I don't see Nvidia crumbling; I see a very strong company hit by something that wasn't of its own making." This comes alongside a proposed class-action lawsuit in California accusing the company and Huang of misleading investors and seeking unspecified damages and a jury trial.
Tuesday's losses came amid broader pressure on technology stocks; the Nasdaq Composite was down 1% on Tuesday afternoon, according to Reuters. The report linked the decline to a combination of a strong U.S. inflation report that bolstered expectations of rate hikes, the internal investigation concerning Huang and complications in developing a data center in Ohio. The coincidence of these factors indicates that Nvidia's share move in the session was not tied to the case alone, based on the factors cited in the report. The company is scheduled to hold a call to discuss results for the third quarter of its 2027 fiscal year on November 17. The results cover the quarter ended October 25, 2026, according to Nvidia's statement cited by the Reuters report.