Nvidia stock drops as probe into CEO Jensen Huang's foreign contact intensifies
Investors reacted with a 4.3% sell-off after the chip giant confirmed it is examining claims that its leader was a target of Chinese intelligence.
By Amit Chukwu ·
Nvidia shares fell 4.3% on Monday, closing at $178.67 after the company announced it was investigating reports that CEO Jensen Huang was the target of a foreign intelligence effort. The stock lost $7.97 in a single session, continuing a downward trend that has seen the chipmaker drop 23% over the last 30 days.
The internal probe began after Huang acknowledged an intimate relationship with a business executive. According to The New York Times, U.S. intelligence determined that this individual was gathering information for China. Nvidia confirmed the start of the investigation on Sunday, placing the matter under formal review.
China’s Foreign Ministry responded to the allegations on Monday by dismissing them as a smear campaign against Beijing. The dispute adds tension to a sector where Nvidia’s advanced processors are central to the artificial intelligence race. These chips power key data centers and have been a primary focus of U.S. export restrictions designed to limit China’s access to cutting-edge semiconductor technology.
Dan Ives, a senior managing director at Yorkville Ives & Co., noted that Huang is “not replaceable” despite the small chance he could step down. Ives suggested the incident would increase regulatory scrutiny in Washington, particularly regarding China and chip restrictions as the AI arms race between the United States and China accelerates.
The investigation creates a near-term overhang on the stock, according to Ives. This uncertainty coincides with growing fears of a bubble in the sector, which has driven steady sell-offs in major AI companies since early October. Nvidia hit an all-time high just last month before the recent decline began.
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