Nvidia Stock Slides 5% on Spying Probe

Nvidia shares lost 5% of their value in premarket trading on Monday. The decline followed a Sunday announcement that the company is investigating reports CEO Jensen Huang was the target of a foreign intelligence effort.

The probe stems from a revelation that Huang had an intimate relationship with a business executive. U.S. intelligence determined that this individual was gathering information for China. Nvidia had reached an all-time high of $243.37 per share in October before the news broke.

Jensen Huang serves as the central figure in Nvidia’s artificial intelligence strategy. The company’s advanced processors power the data centers used to train major AI models. These chips are also a key focus of U.S. export restrictions designed to limit China’s access to semiconductor technology.

China’s Foreign Ministry responded to the allegations during a routine briefing on Monday. Officials dismissed the spying claims as a smear campaign against Beijing. The statement sought to minimize the diplomatic fallout from the domestic investigation.

Dan Ives, a senior managing director at Yorkville Ives & Co., assessed the risk to the company’s leadership. He noted that there is a small chance Huang could be removed or step down from the CEO role. Ives argued that Huang is not replaceable within the current management team.

“Jensen is the core DNA of Nvidia and its AI success and ambitions are heavily tied to him staying on as CEO,” Ives wrote in an analyst note. He added that the investigation will remain an overhang on shares in the near term as investors weigh the potential for leadership changes.