Nvidia Shares Fall as Board Opens Probe Into Spy-Target Reports

Nvidia futures on CME’s Globex were down 4.7% at $178.77 on Monday, while Nasdaq futures were 0.1% higher. The chipmaker’s shares were recently 4.7% lower at $177.90 in Blue Ocean’s overnight session. The stock has been roughly flat this year and is about 22% below its October peak.

The board said Sunday that a committee of independent directors, assisted by outside counsel, would oversee an inquiry into reports that Huang was the target of a foreign espionage effort. The board said the investigation would examine “all available information” and expressed confidence in Huang’s leadership.

The Wall Street Journal reported earlier that U.S. officials concluded last year that Alice Huang, then a senior executive at Megaspeed International, shared information with the Chinese government while working with Nvidia on data centers in Asia. She also goes by Huang Le and is not related to Nvidia’s CEO. On Sunday, Jensen Huang apologized to staff for being unfaithful to his wife.

Analysts said the probe could prompt congressional inquiries and weigh on Nvidia shares. Yorkville Ives analysts said Huang would likely remain CEO in the near term, but his position could depend on the board’s findings. “This will add risk to the stock, as he is so important to the Nvidia story and strategy globally,” Dan Ives and colleagues wrote. They also said the case could intensify U.S. scrutiny of chip sales to China.

Citrini Research’s Jukan Choe pointed to Huang’s influence and Nvidia’s lack of an obvious successor, saying concerns could arise that innovation would slow if his leadership weakened. Semiconductor stocks sold off last week as the Democrats’ midterm election victory heightened anxieties about the AI trade.