Nvidia stock crashes again as Chinese spy controversy deepens: Nvidia’s latest sell-off has put two questions at the centre of its investment story. Could Jensen Huang lose his position as CEO? And could sensitive Nvidia technology or information have been compromised? The stock fell another 7% in the latest session and is now down 12% since the controversy surrounding Huang began.
Across 24 trading days, the decline has reached 32%, wiping out $1.8 trillion in market value. The scale of the fall suggests investors are reassessing risks that go beyond chip demand and AI spending.
The latest decline adds to a much wider sell-off. YCharts market-cap data shows Nvidia's valuation falling from approximately $5.73 trillion on October 7 to $4.07 trillion on November 10. That represents a reduction of about $1.66 trillion, or nearly 29%, based on the reported market values.
The latest two sessions have added another $470 billion to the pressure on the stock, according to Reuters. Microsoft also overtook Nvidia to become the world's second-most valuable company on Tuesday, following the chipmaker's decline.
According to a report by The Information cited by Reuters, Alice Huang and her associates used a network of companies in China and Singapore to obtain Nvidia chips for Chinese customers. The report alleged that the network helped facilitate at least $7.5 billion in chip shipments and moved around 240,000 H100, H200 and some A100 chips into China.
Some of these chips were subject to US export restrictions. The report also linked the computing capacity to Chinese technology companies, including Alibaba and Tencent, and smaller AI research laboratories.
These are serious allegations, but they have not been independently established. Reuters said it could not independently verify the report. Nvidia also did not immediately respond to its request for comment.
The issue is important because the US has imposed restrictions on advanced AI chip exports to China. Any evidence of restricted chips reaching Chinese customers through third-party networks could bring further scrutiny to Nvidia's distribution system and its compliance procedures.
The board said it had no reason to believe that US national security or Nvidia's confidential technology had been compromised. It also expressed confidence in Huang and said he would cooperate with the investigation.
Reports about a possible foreign intelligence operation have raised concerns, but there is no established evidence that Nvidia's chip designs, source code or other confidential technology were stolen.
Huang's leadership is another important issue for shareholders. He has been closely associated with Nvidia's AI strategy and its growth into a multitrillion-dollar company. A sudden leadership change could create uncertainty about its future direction.
For now, the board has not announced any plan to remove him.
For the second quarter of fiscal 2027, ended July 26, Nvidia reported revenue of $96.22 billion, up 106% from $46.74 billion a year earlier. Revenue also increased 18% from the previous quarter.
Its Data Center business generated $89 billion, up 117% year over year. This segment accounted for more than 92% of total quarterly revenue.
Nvidia reported non-GAAP earnings of $2.22 per diluted share, compared with $1.01 a year earlier. Its non-GAAP gross margin stood at 75%.
In its previous earnings announcement, Nvidia forecast third-quarter revenue of $108 billion, plus or minus 2%. That would represent an increase of about 12% from its second-quarter revenue of $96.22 billion.
Wall Street analysts tracked by MarketBeat expect revenue of approximately $108.8 billion and earnings of $2.47 per share. These are analyst estimates, not company guidance.
Nvidia also guided for a non-GAAP gross margin of around 74%, compared with 75% in the second quarter.
The recent sell-off has created a difficult situation for investors. On one side, Nvidia's financial results show strong revenue growth and continued demand for AI computing. On the other, questions about Huang's leadership, export-control compliance and the alleged China connection have added risks that quarterly revenue figures alone cannot resolve.
A recovery could attract bargain hunters if the investigation provides clarity and the earnings report supports the company's growth outlook. But another strong quarterly result may not be enough to remove concerns about governance and national security.
Across 24 trading days, the decline has reached 32%, wiping out $1.8 trillion in market value. The scale of the fall suggests investors are reassessing risks that go beyond chip demand and AI spending.
Nvidia stock crash: Why did NVDA shares fall another 6%?
Nvidia shares extended their losses on Tuesday as investors reacted to reports about Huang's relationship with Alice Huang, a Chinese businesswoman who has been alleged to have links to Beijing's intelligence network. The company's board has launched an independent investigation into whether its CEO was targeted by a foreign intelligence operation.The latest decline adds to a much wider sell-off. YCharts market-cap data shows Nvidia's valuation falling from approximately $5.73 trillion on October 7 to $4.07 trillion on November 10. That represents a reduction of about $1.66 trillion, or nearly 29%, based on the reported market values.
The latest two sessions have added another $470 billion to the pressure on the stock, according to Reuters. Microsoft also overtook Nvidia to become the world's second-most valuable company on Tuesday, following the chipmaker's decline.
Jensen Huang Chinese spy controversy: What are the allegations against Nvidia's CEO?
The controversy centres on Alice Huang, a former executive at Singapore-based data centre company Megaspeed. US intelligence officials reportedly suspected that she was gathering information for Beijing. The two Huangs are not related.According to a report by The Information cited by Reuters, Alice Huang and her associates used a network of companies in China and Singapore to obtain Nvidia chips for Chinese customers. The report alleged that the network helped facilitate at least $7.5 billion in chip shipments and moved around 240,000 H100, H200 and some A100 chips into China.
Some of these chips were subject to US export restrictions. The report also linked the computing capacity to Chinese technology companies, including Alibaba and Tencent, and smaller AI research laboratories.
These are serious allegations, but they have not been independently established. Reuters said it could not independently verify the report. Nvidia also did not immediately respond to its request for comment.
The issue is important because the US has imposed restrictions on advanced AI chip exports to China. Any evidence of restricted chips reaching Chinese customers through third-party networks could bring further scrutiny to Nvidia's distribution system and its compliance procedures.
Nvidia board investigation: Could Jensen Huang lose his CEO position?
Nvidia's board announced an independent investigation on November 8. A committee of independent directors, assisted by outside legal counsel, will oversee the review.The board said it had no reason to believe that US national security or Nvidia's confidential technology had been compromised. It also expressed confidence in Huang and said he would cooperate with the investigation.
Reports about a possible foreign intelligence operation have raised concerns, but there is no established evidence that Nvidia's chip designs, source code or other confidential technology were stolen.
Huang's leadership is another important issue for shareholders. He has been closely associated with Nvidia's AI strategy and its growth into a multitrillion-dollar company. A sudden leadership change could create uncertainty about its future direction.
For now, the board has not announced any plan to remove him.
Nvidia financial results: Does AI chip demand support the stock?
Nvidia's latest financial results show that its underlying business continued to grow at a strong rate before the controversy intensified.For the second quarter of fiscal 2027, ended July 26, Nvidia reported revenue of $96.22 billion, up 106% from $46.74 billion a year earlier. Revenue also increased 18% from the previous quarter.
Its Data Center business generated $89 billion, up 117% year over year. This segment accounted for more than 92% of total quarterly revenue.
Nvidia reported non-GAAP earnings of $2.22 per diluted share, compared with $1.01 a year earlier. Its non-GAAP gross margin stood at 75%.
Nvidia next earnings on November 17: What are Wall Street analysts expecting?
Nvidia's next quarterly earnings report could become an important test for the stock. The company is expected to report its third-quarter fiscal 2027 results on November 17.In its previous earnings announcement, Nvidia forecast third-quarter revenue of $108 billion, plus or minus 2%. That would represent an increase of about 12% from its second-quarter revenue of $96.22 billion.
Wall Street analysts tracked by MarketBeat expect revenue of approximately $108.8 billion and earnings of $2.47 per share. These are analyst estimates, not company guidance.
Nvidia also guided for a non-GAAP gross margin of around 74%, compared with 75% in the second quarter.
Nvidia stock outlook: Will investors buy the dip after the latest crash?
The next few weeks could bring two major developments for Nvidia shareholders: the outcome of the board investigation and the company's November 17 earnings report.The recent sell-off has created a difficult situation for investors. On one side, Nvidia's financial results show strong revenue growth and continued demand for AI computing. On the other, questions about Huang's leadership, export-control compliance and the alleged China connection have added risks that quarterly revenue figures alone cannot resolve.
A recovery could attract bargain hunters if the investigation provides clarity and the earnings report supports the company's growth outlook. But another strong quarterly result may not be enough to remove concerns about governance and national security.