Nvidia shares slumped again last night – taking losses since its peak a little over a month ago to $1.7 trillion (£1.3 trillion).
As Donald Trump revealed the FBI is ‘looking into’ Nvidia boss Jensen Huang’s affair with a suspected Chinese spy, the stock fell another 5.5 per cent.
The chipmaker has shed 10 per cent, or $430billion of its value, in two days of trading since the tech tycoon admitted to cheating on his wife with alleged Beijing agent Alice Huang, who is unrelated.
The crisis engulfing Nvidia has raised fears that Huang – a linchpin of the AI revolution – will not hang onto his job at the top of corporate America.
The Nvidia board has commissioned an independent probe into the affair, while Trump revealed ‘the FBI is looking into it’.
Huang and Nvidia are also being sued in a class action claiming they defrauded shareholders by keeping the affair secret.
Chipmaker Nvidia has shed 10%, or $450bn of its value, in two days of trading after its boss admitted to cheating on his wife with an alleged Chinese spy
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The latest slump in the share price means Nvidia has lost nearly 30 per cent of its value since shares peaked on October 6.
In that time, its value has dropped by $1.7 trillion to $4.1 trillion. Describing Huang as ‘the core DNA of Nvidia’ and ‘not replaceable’, tech analyst Dan Ives said the firm would be worth as much as 30 per cent less if he was removed.
That would wipe another $1.2 trillion off its value.
‘The China spy soap opera has been a black eye moment for Jensen and Nvidia and thrown the company, the board, and of course Jensen into a very negative spotlight for his actions,’ said Ives.
‘Investors are now basically trying to figure out: does Jensen stay on as chief executive or the board investigation results with him ultimately being removed.
At the end of the day, there is only one Jensen, and Nvidia will dramatically change as a company if he is no longer chief executive, with a major negative ripple impact across the tech industry and AI revolution.’
Nvidia boss Jensen Huang admitted to cheating on his wife Lori (pictured) with alleged Beijing agent Alice Huang, who is unrelated
London-based trading firm IG said armchair investors have used the slump in Nvidia’s share price as an opportunity to buy the stock in the hope of a rebound.
Reporting a five-fold increase in the number of clients buying shares, IG chief market analyst Chris Beauchamp said: ‘With shares coming under pressure following the revelations surrounding Huang, retail investors are treating the uncertainty as an opportunity to increase their exposure to the AI giant.’
But he added: ‘Nvidia has become the poster child of the AI boom, and Huang has been central to its extraordinary rise. Any threat to his leadership risks shaking confidence, not just in Nvidia, but in the wider technology rally.
‘Investors may see a bargain in the sell-off, but the bigger question is whether the market can look past a controversy that strikes at the very top of one of its most important companies.’
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