Nvidia Loses $192 Billion in One Session as CEO Probe Rattles Stock
Nvidia's market value fell by nearly $192 billion in one US session as shares closed at $178.67, about 4% lower, while the S&P 500 rose 2.35%. A lawsuit and allegations about CEO Jensen Huang drove the sell-off.
Nvidia lost nearly $192 billion in market value in a single US trading session, as shares of the world's most valuable chipmaker fell while the broader market rallied. The stock closed at $178.67, down around 4 percent for the day.
The drop was steeper early on. Shares plunged more than 8 percent at the opening bell before recovering some ground.
A falling stock in a rising market
Wall Street was having a strong day. The S&P 500 climbed 2.35 percent, its best session since April. The Nasdaq surged 2.7 percent, its strongest performance since July.
Semiconductor stocks were largely higher too. Nvidia moved the opposite way.
Lawsuit and allegations against Huang
The immediate backdrop is controversy around Chief Executive Jensen Huang, 63. Allegations involve an extramarital relationship, links to a Chinese businesswoman suspected of spying for Beijing, and possible national security implications.
Nvidia and Huang were sued in a proposed class-action lawsuit. It accuses them of defrauding shareholders by concealing the CEO's alleged ties to the businesswoman. A class action is a case brought on behalf of a larger group of investors.
Separately, reports said Huang told Nvidia employees he had been unfaithful to his wife. He did not disclose details of the alleged relationship.
The allegations have raised questions about whether Huang's personal associations could undermine US efforts to keep its technological lead over China. Nvidia is investigating whether he was targeted by foreign intelligence, and analysts have flagged risks to an industry that increasingly depends on the company.
Why Huang matters beyond Nvidia
Nvidia's graphics processing units, or GPUs, power the training and running of some of the world's most advanced AI models and services, including ChatGPT. The company has also used its large cash reserves to invest across the AI ecosystem, including cloud-computing providers, technology suppliers and some of the largest AI laboratories.
Huang's words move markets. A dinner of fried chicken and beer in Seoul with the CEOs of Samsung and Hyundai last year sent shares of two South Korean food companies soaring. His description of Marvell Technology as a potential "trillion-dollar company" helped push the custom-chipmaker's shares to record highs.
He has also been one of the loudest defenders of the AI boom. Huang has repeatedly dismissed fears of an AI bubble and pushed back against warnings from Anthropic CEO Dario Amodei that the technology could pose an existential threat to humanity.
Earlier pressure on the shares
Nvidia shares had been under pressure since last month over the scale of spending needed for the data centers that sustain the global AI expansion. The latest sell-off, however, focused more directly on the company's leadership.
