Nvidia shares fell as much as 8% on Monday, briefly threatening to erase roughly $350 billion in market value, as investors weighed the possibility that CEO Jensen Huang could lose his job over an alleged Chinese intelligence operation. The selloff unfolded even as the broader market rallied.

For a company that has become the public face of the artificial intelligence boom, it is a costly scandal — and the investigation behind it is only beginning.

Board opens investigation but stands behind its CEO

Nvidia's board announced an independent investigation following reports that Huang had a romantic relationship with a business executive whom U.S. intelligence believes was recruited by China's Ministry of State Security.

Huang acknowledged being unfaithful to his wife in a message to employees, apologized and pledged to cooperate. The board said it had no reason to believe company secrets or U.S. national security had been compromised, and expressed confidence in his leadership. Independent investigations of executive conduct are typically carried out by outside counsel, allowing the facts to be examined at arm's length from the board overseeing the process.

The allegations have not established that Huang disclosed sensitive information or knowingly cooperated with foreign intelligence. Investors, however, are already confronting the possibility of a much bigger problem.

Nvidia was already losing trillions

Nvidia's market capitalization had declined from roughly $5.78 trillion on October 6 to $4.51 trillion by November 6, according to YCharts — approximately $1.27 trillion in lost value before the board publicly announced its investigation.

The latest controversy adds another risk to a stock already under pressure from questions about the sustainability of massive AI infrastructure spending.

Nvidia also carries enough weight to move the broader market on its own. A November 6 snapshot placed the company at 6.93% of the SPDR S&P 500 ETF, which tracks the market-capitalization-weighted index of major U.S. companies. At that weight, a 5.6% decline in Nvidia alone would subtract approximately 0.39 percentage points from the S&P 500's performance — assuming everything else stayed unchanged, which is unlikely given that Nvidia is the main hardware provider for many other companies in the country, including some in the top 10. Index funds tracking the S&P 500 hold each constituent in proportion to its weight, so passive investors carry Nvidia exposure through broad-market vehicles regardless of whether they own the shares directly.

Yet the S&P 500 rose 1.48% Monday morning, while the Nasdaq gained 1.87%. Other semiconductor stocks also rallied, suggesting investors were treating Nvidia's troubles as largely company-specific rather than abandoning the broader AI trade.

Could Huang actually be forced to resign?

Huang has led Nvidia since co-founding the company in 1993, and replacing him would involve considerably more than finding another executive capable of presenting a new GPU. He is the only chief executive the company has ever had, meaning Nvidia has never navigated a leadership transition at the top. The 63-year-old CEO has built an unusually centralized management structure and maintains important relationships with customers, suppliers and governments. Analysts have questioned whether Nvidia has an obvious successor.

Chris Weston, head of research at Pepperstone, told Reuters he did not expect Huang to resign. But if investors genuinely believed his departure was imminent, the stock's reaction could be an "absolute bloodbath."

Bloodbath or not, the stock would be exposed to significant uncertainty. Huang is the figure responsible for building Nvidia into an industry powerhouse, and his exit would be comparable to Mark Zuckerberg leaving Meta, Elon Musk leaving Tesla or Vitalik Buterin disowning Ethereum. Beyond pure market analysis, Huang is the name behind Nvidia, and market sentiment can react to that.

Dan Ives of Yorkville Ives & Co. similarly described Huang as not replaceable, although he acknowledged the investigation could ultimately result in his removal.

An extramarital affair alone does not automatically justify dismissing a CEO. Unless the scandal becomes a reputational risk for Nvidia, it is possible that Huang weathers it and markets recover as long as the company remains extremely profitable. The more consequential question is whether his conduct exposed sensitive information, created security vulnerabilities or compromised Nvidia's business interests. So far, the company has announced no findings establishing such failures.

A resignation could trigger another sharp selloff, particularly without a credible succession plan. But there is no reliable way to calculate how far the stock would fall, or whether investors would ultimately welcome new management.

How much further could Nvidia stock fall?

Nvidia has been in a sustained bullish trend since ChatGPT entered the market in 2023, but its weekly chart was already flashing warning signs before the allegations emerged.

The stock traded near $179.34 on Monday, significantly below its 50-week exponential moving average of approximately $199.16. That indicator tracks the longer-term price trend while assigning greater weight to recent trading. The breakdown is particularly significant because Nvidia spent much of its recent bull market above that average; its last comparable breaches came during the 2025 correction and, before that, in the pre-ChatGPT era of 2022-2023.

The stock had already crossed below the indicator before the scandal broke, meaning the investigation accelerated an existing bearish trend rather than causing the entire breakdown.

Based on the weekly chart, several levels stand out:

• $170.24 — Monday's intraday low and an immediate downside reference.
• $164.27 — a previous 52-week low, roughly 8.4% below $179.34.
• $150 — a potential psychological support area, implying another 16.4% decline.
• $137.41 — deeper support suggested by the chart's trend channel, approximately 23.4% below the snapshot price.

These are potential levels based on technical analysis, and a recovery above $190, followed by a move back above the 50-week EMA near $199, would improve the technical outlook. Monday's weekly candle also remains unfinished, so a confirmed weekly close below the indicator would carry more weight than an intraday move.

Trump defends Huang, but China remains a problem

President Donald Trump has defended Huang, describing him as an honorable person who has done an exceptional job for the United States.

"I think he probably has an excuse for it. You have to hear it," Trump told reporters Sunday.

The president's support could help Huang politically, but the controversy comes as Nvidia navigates Washington's restrictions on advanced AI chip exports to China. The restrictions carry commercial significance: China has historically ranked among Nvidia's largest markets. Huang has repeatedly advocated allowing Nvidia to sell processors to Chinese customers, and allegations involving a suspected intelligence operation could complicate those negotiations, even without evidence that the CEO knowingly participated in espionage.

China's Foreign Ministry has rejected the allegations as baseless.

Congressional Republicans have also requested a private briefing on Nvidia's security procedures, with lawmakers seeking Huang's agreement to a briefing date by November 11, according to Axios.

Investors have another important date approaching: Nvidia is scheduled to report its quarterly earnings on November 17, giving the market an opportunity to assess the underlying business against the uncertainty surrounding its CEO. The board has not disclosed when its independent investigation will conclude.