EL7 Research · Equities
11 November 2026 · Official closes through the 10 November session
NVIDIA lost about $428 billion in market value in two sessions while chip stocks rose, although the story had been public since late October. We separate the case’s three strands, assess what the market is pricing against the company’s books and four historical precedents, and identify what will settle the issue within a week.
NVIDIA lost about $428 billion in market value (Market Capitalization), the value of all the company’s shares, in just two sessions. The decline ran from the 6 November close of $186.64 to the 10 November close of $168.89, amounting to 9.51% (EL7 calculation based on 24.1 billion shares outstanding). Over the same two sessions, the SMH semiconductor equity ETF, which holds electronic chip stocks, rose 4.24%, AMD rose 14.74%, and Broadcom rose 13.04%. The gap between NVIDIA and its sector reached 13.75 percentage points; a percentage point measures the difference between two percentages. This alone means the market was selling one company, rather than artificial intelligence.
The story was not new to the market. The The New York Times report on the relationship between chief executive Jensen Huang and the Megaspeed executive appeared in late October, and the three House committees issued their briefing request on 5 November. Yet NVIDIA fell just 13.34% between 28 October and 6 November, against 18.27% for the sector, outperforming it. What moved the price was not the news but confirmation: Huang’s admission in his 8 November employee letter, the board’s announcement of an independent investigation that same day, and then the The Information report on 10 November linking the relationship to chip shipments to China.
Three strands must be kept separate. The first is the board’s investigation into possible intelligence targeting of the chief executive; the board says it sees “no reason to believe” national security or company secrets were compromised. The second is the export controls enforcement case involving Megaspeed; these are government restrictions on exporting specific technologies to specific countries. The government investigation has been under way since October 2025, with no ruling issued. The third is the political and legal track: a voluntary congressional briefing request for 18 November and a shareholder class action, a lawsuit brought on behalf of a group of affected parties. The widely cited $7.5 billion figure comes from a press report citing two people, rather than a finding by any official body.
Where does the business risk lie? Q3 forward guidance is $108 billion, management’s published estimate of future performance, and assumes zero computing revenue from China. Hopper shipments to China accounted for less than 1% of Q2 data center revenue. Direct Chinese revenue therefore cannot explain a $428 billion loss. The market is pricing something broader: key-person risk, the risk to a company from the absence of someone on whom it depends heavily, at a business led by its founder for 33 years, and the possibility that the case could lead to tighter export restrictions on intermediary markets in Southeast Asia, where Megaspeed operates.
What history says. Across four executive scandal precedents we measured, losses remained small and brief when the scandal was purely personal (Intel fell 1.80% in two sessions and McDonald's fell 0.91%), and deepened when it reached the business or regulatory oversight (Wynn Resorts fell 18.50% in two sessions and remained below its prior level after 20 sessions). NVIDIA’s 9.51% decline places it between the two groups: the market has yet to decide which kind of scandal this is.
What will decide the outcome? Three dates within a week: Huang's response to the briefing request (deadline 11 November), third-quarter results on 17 November, and the requested briefing on 18 November. The EL7 scoring model, which knows nothing of the scandal, still ranks NVIDIA 10 out of 176 companies in its industry with a score of 89.94, while the Price Momentum pillar, which measures the direction and strength of price moves, and the sentiment pillar have fallen into the lower half. The financial data so far show a sound business, and the price reflects the possibility of that changing.
NVIDIA and semiconductor ETF SMH prices rebased to 100 at the close on 28 October 2026, through the close on 10 November
| Series | Date | Value |
|---|---|---|
| NVIDIA | 28 October 2026 | 100.00 |
| NVIDIA | 29 October 2026 | 99.20 |
| NVIDIA | 30 October 2026 | 95.01 |
| NVIDIA | 2 November 2026 | 93.82 |
| NVIDIA | 3 November 2026 | 95.97 |
| NVIDIA | 4 November 2026 | 92.92 |
| NVIDIA | 5 November 2026 | 84.32 |
| NVIDIA | 6 November 2026 | 86.66 |
| NVIDIA | 9 November 2026 | 82.96 |
| NVIDIA | 10 November 2026 | 78.41 |
| SMH fund | 28 October 2026 | 100.00 |
| SMH fund | 29 October 2026 | 98.94 |
| SMH fund | 30 October 2026 | 92.04 |
| SMH fund | 2 November 2026 | 89.54 |
| SMH fund | 3 November 2026 | 91.34 |
| SMH fund | 4 November 2026 | 88.83 |
| SMH fund | 5 November 2026 | 78.87 |
| SMH fund | 6 November 2026 | 81.73 |
| SMH fund | 9 November 2026 | 85.86 |
| SMH fund | 10 November 2026 | 85.20 |
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