EN
Why Nvidia Stock Was Down Today
Key Points
Nvidia's board opened an investigation into reports that CEO Jensen Huang was the target of a foreign intelligence effort, after he admitted to intimate relations with Megaspeed CEO Alice Huang.
Nvidia stock fell even as the rest of the market jumped on the second day of a post-election recovery.
The probe won't affect the numbers Nvidia reports this quarter, but the board's inquiry or any government investigation could carry real long-term consequences.
Nvidia Corporation (NASDAQ:NVDA) stock fell 4.3% on Monday, Nov. 9, after the company's board opened an investigation into its own CEO, Jensen Huang.
The S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC) finished up 2.4% and 2.8%, respectively.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Why Nvidia's board is investigating Jensen Huang
On Sunday, Nvidia's board of directors said it was opening a probe into recent reports that Jensen Huang was the target of a foreign intelligence effort. In a letter to employees, the Nvidia chief admitted to intimate relations with Alice Huang, an executive of the cloud computing company Megaspeed. Alice Huang is an alleged Chinese asset, according to reporting from the New York Times (NYSE:NYT).
The board said it had no reason to believe national security or Nvidia's secrets were compromised and said that it "has confidence in Jensen and his leadership team."
What the Jensen Huang probe could mean for Nvidia stock
The story broke at an already sensitive time for chipmakers and the AI trade. Three House Republican committee chairs have already asked Jensen Huang for a closed-door briefing on Nov. 18, and it's possible that more thorough investigations follow.
Image source: Getty Images.
None of this is going to affect the numbers Nvidia reports this quarter, but depending on the results of the board's inquiry -- or any potential government investigations -- there could be real consequences long-term. Jensen Huang is not just any CEO.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and The New York Times Co. The Motley Fool has a disclosure policy.