Nvidia shares plunged nearly 7.5% at the opening bell on Wall Street on Monday, 9 November, wiping $335 billion from the semiconductor giant’s market valuation as investors reacted to an investigation into whether Chief Executive Jensen Huang had been targeted by a foreign intelligence operation.
The shares fell to $172.75, down from Friday’s close of $186.64, a decline of $13.89 per share.
Based on Nvidia’s approximately 24.15 billion outstanding shares, the fall represents an estimated $335 billion reduction in market capitalisation, one of the most significant single-session valuation losses for the artificial intelligence chipmaker.
The sell-off followed Nvidia’s announcement on Sunday that its board had launched an independent investigation into reports concerning Huang’s relationship with a Chinese business executive suspected by US intelligence officials of gathering information for Beijing.
Huang acknowledged having been unfaithful to his wife and apologised to his family and colleagues, while committing to cooperate fully with the investigation.
Reports have linked the controversy to Alice Huang, a former executive associated with Singapore-based data centre company Megaspeed International, which has separately faced scrutiny over allegations concerning the movement of advanced Nvidia chips to China.
However, the espionage allegations remain unproven, and China has rejected claims of an intelligence operation.
Nvidia’s board emphasised that it currently has no reason to believe either US national security or company secrets were compromised.
The investigation will be overseen by independent directors assisted by external legal advisers, with the company expressing continued confidence in Huang and its leadership team.
The sharp decline in Nvidia’s shares comes at a sensitive time for the wider artificial intelligence industry, following last week’s substantial sell-off in semiconductor and technology stocks.
Investors have already been questioning the sustainability of AI infrastructure spending, elevated technology valuations and the potential for tighter regulatory scrutiny following the US midterm elections.
The investigation introduces additional uncertainty surrounding Huang, who co-founded Nvidia and has played a central role in establishing the company’s dominant position in advanced AI computing hardware.
Despite the approximately $335 billion loss in market value at the opening bell, the decline represents a change in Nvidia’s quoted equity valuation rather than a direct cash loss to the company.
The share price also remains subject to significant movement throughout Monday’s trading session.
Attention will now focus on the findings of Nvidia’s independent investigation, any potential regulatory implications and whether investors regain confidence in the company’s leadership, as the semiconductor giant navigates another period of volatility.
– with Agencies inputs --
