Investor anxiety wipes $427 billion from Nvidia’s value over two sessions amid investigation
Key Facts
Investor anxiety over the controversy surrounding Jensen Huang erased more than $427 billion from Nvidia’s market value over the two previous trading sessions through November 11, according to a Reuters report. The company was facing scrutiny over its chief executive after its board announced an independent investigation. In a statement issued on November 8, the board said the investigation followed reports that Huang, the company’s founder and chief executive, had been the target of a foreign intelligence effort. The board said it had no reason to believe national security or Nvidia’s secrets had been compromised. It said the investigation would examine all available information.
In a subsequent statement, the independent board members said they had retained attorney John Kim and the law firm Wachtell, Lipton, Rosen & Katz to conduct the investigation. The statement issued on November 10 said Kim had previously served as acting U.S. attorney for the Southern District of New York. The board expressed confidence in Huang and the leadership team, saying the chief executive supported the review and was committed to cooperating with it. The Associated Press reported that Huang, 63, would remain in his position during the investigation. The agency quoted a Nvidia spokesperson as saying Huang was committed to continuing to lead the company without interruption.
The political controversy escalated alongside the investigation, with Republican Senator Kevin Cramer, a member of the Senate Banking Committee, calling on Huang to step down as chief executive, according to Reuters. That call differs from the board’s position: it has expressed confidence in Huang and has not announced his removal. On November 10, Nvidia shares were down 6.5% during the session, amid investor concerns that the chief executive might be replaced, according to a Reuters report. The report quoted a strategist describing the company as strong but said it faced a crisis of its own making. It also noted that investors were concerned about the case’s impact on the company.
The stock rebounded the following day, rising 2.9% on Wednesday, November 11, as artificial intelligence shares recovered, according to the Associated Press. The move followed losses in previous sessions, including a 4.3% decline on Monday that erased about $190 billion from its market value, followed by a drop of about 5.5% at Tuesday’s close, the agency reported. Still, Baird cut its rating on the stock to “Neutral” on November 11, and Morgan Stanley removed it from its top picks list while maintaining an “Overweight” rating. Morgan Stanley said near-term uncertainty would persist and that Huang’s leadership was important to the company’s strategic direction. The report showed that 59 of 64 brokerages rated the stock Buy or Strong Buy.
Investors are turning their attention to Nvidia’s announced call to discuss results for the third quarter of its fiscal 2027, scheduled for November 17. The company said the call would begin at 2 p.m. Pacific time, or 5 p.m. Eastern time. Reuters had cited the upcoming earnings report as one of the events investors would watch during the period of volatility. Against the backdrop of the decline, the Associated Press reported that the stock fell 9.3% on November 5, leaving it down 2.6% year to date through that date. This followed annual gains of nearly 39%, 171% and 239% in the previous three years, respectively.