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Nvidia (NVDA) shares fell about 4% Monday and 5.5% Tuesday to a low since March as the board probes CEO Jensen Huang and a new shareholder suit lands.
- Nvidia fell 4.3% Monday and 5.5% Tuesday, closing near $169, the lowest since March 30.
- The board has opened an independent inquiry, and a shareholder class action has been filed in federal court in San Jose.
- Market value fell below $4 trillion intraday Tuesday, from above $5.5 trillion in early October.
Lead
Nvidia (NVDA) shares closed at about $169 on Tuesday, their lowest level since March 30, after CEO Jensen Huang acknowledged an affair with a woman the U.S. government alleges was a Chinese intelligence asset. The stock lost 4.3% on Monday, erasing nearly $200 billion in market value, and then 5.5% on Tuesday. The shares are down roughly 22% over the past month.What Happened to Nvidia and Jensen Huang?
Huang disclosed the relationship in a Sunday memo to employees, writing that he had been unfaithful to his wife and had fallen short as chief executive. The woman is an executive at Megaspeed, an Nvidia customer. U.S. authorities allege she used the company to move AI accelerators worth at least $4.6 billion to Southeast Asia, including export-restricted models, and that some may have reached China. The FBI is investigating.
The board announced the same day that it is forming a committee of independent directors to work with outside counsel. It said it has no reason to believe national security or Nvidia trade secrets were compromised. The inquiry is expected to run four to six weeks, leaving an overhang on the stock until it concludes.
Why Did Nvidia Shares Fall So Sharply?
Investors are pricing a mix of governance, legal and export-control risk. Nvidia sells the processors that underpin most of the AI buildout, and any suggestion that restricted chips reached China raises the prospect of tighter licensing and closer scrutiny of its channel partners. Huang is also the company's public face and chief strategist, so uncertainty about his position affects the whole valuation.
The shareholder suit was filed Monday in federal court in San Jose by the Rosen Law Firm. It alleges false or misleading statements about Huang's conduct and the Megaspeed relationship, and it cites material risk to the company's reputation and business. A request for a congressional briefing has added political pressure.
Market Reaction Across AI Stocks
The selloff was concentrated in Nvidia rather than across AI stocks as a group. AMD (AMD) rose 1.3% on Tuesday and Broadcom (AVGO) gained nearly 4%, even as a hotter-than-expected inflation reading weighed on the broader market. Microsoft (MSFT) briefly overtook Nvidia in market value during Tuesday's session, and Apple (AAPL) had already moved ahead before the news broke.
Nvidia's market capitalization dipped below $4 trillion for the first time since July 2025. Options and equity markets continue to treat a Huang departure as the less likely outcome, with the stock's decline reflecting uncertainty rather than a settled view on his tenure.
What Comes Next for Nvidia?
The next catalysts are the independent committee's findings, any action by the Justice Department or Congress on chip diversion, and the first rulings in the shareholder case. Nvidia's next quarterly report will test whether customers and suppliers have changed their behavior. Export-control compliance at partners such as Megaspeed is likely to draw attention from regulators in Washington and Southeast Asia.
Outlook
Nvidia enters the coming weeks with its leadership under review, a federal securities suit pending and a share price roughly 22% below where it stood a month ago. The four-to-six-week board inquiry sets the timetable for resolving the governance question. The export-control questions are likely to take longer.
Mentioned tickers: NVDA, AMD, AVGO, MSFT, AAPL
