Nvidia shares fell in premarket trading on Monday, November 9, as investors weighed an investigation into Chief Executive Jensen Huang’s relationship with a businesswoman accused of spying for China. The stock initially declined around 5% and was last trading 4.4% lower before the market opened.
Reports in The New York Times and The Financial Times said U.S. intelligence agencies had identified Alice Huang, an executive at cloud company Megaspeed, as someone passing information to Beijing. Nvidia said its board had opened an independent investigation following reports that its CEO had been targeted by a foreign intelligence operation.
In a statement on Sunday, Nvidia said Jensen Huang supported the investigation and had pledged to cooperate. The company’s co-founder acknowledged in an email to employees that he had failed to meet his responsibilities to colleagues, directors, partners and shareholders. He also admitted being unfaithful to his wife, apologized and said his conduct had hurt his family.
China disputed the espionage allegations. Foreign Ministry spokesperson Guo Jiakun said on Monday that the Chinese spy narrative lacked substantiation, according to Reuters.
Dan Ives, senior managing director at Yorkville Ives & Co., said the central issue for investors would be whether Huang retained his position. In a Sunday note, Ives predicted congressional inquiries and continuing pressure on the stock. He said the board’s findings could put Huang’s job at risk, creating uncertainty because of his importance to Nvidia’s global strategy. He also expected greater scrutiny of chip sales to China.
The decline followed a difficult week for technology shares as investors reconsidered the data center expansion after Democrats gained control of Congress. Asian technology stocks recovered on Monday from Friday’s losses, while U.S. chip companies remained weaker in premarket trading. Intel, Marvell, Qualcomm and Arm each fell more than 1%.
Panmure Liberum investment strategist Joachim Klement said the fallout was currently limited to Nvidia. He warned, however, that a threat to Huang’s position could lead the company to reduce support for other businesses in Asia or the United States, potentially extending the effects to additional semiconductor stocks.
President Donald Trump praised Huang on Sunday, while saying he had not discussed the investigation with him. Sequoia partner Shaun Maguire also defended the executive in a post on X, emphasizing his entrepreneurial achievements and importance to American artificial intelligence leadership. SpaceX and Tesla CEO Elon Musk shared Maguire’s post and expressed agreement.
Nvidia is scheduled to release its third-quarter earnings on November 17. The company also plans to hold a major conference in Washington, D.C., at the end of the month.
