Nvidia shares fell about 5% in early trading Monday after the company's board said it was opening an independent investigation into reports that CEO Jensen Huang was the target of a foreign intelligence effort.
The stock traded near $177 shortly before 10 a.m. Eastern, down from Friday's close of $186.64, after dropping as low as $170.24, according to CNBC market data. The broader market moved the other way: the Nasdaq, S&P 500, and Dow all rose more than 1.5% as stocks rebounded from last week's sell-off, Yahoo Finance reported.
Prices are from early Monday trading and will change through the session.
What Triggered the Drop
On Sunday, Nvidia's board said a committee of independent directors, working with outside counsel, would investigate reports that Huang had been targeted by a foreign intelligence effort. The board said it had no reason to believe that national security or Nvidia secrets were compromised, and that Huang would remain CEO, ABC News reported.
The same day, Huang admitted in an email to staff that he had been unfaithful to his wife and apologized to his family and colleagues. He wrote that he had "fallen short of that responsibility," according to the Associated Press via PBS. He had previously described his relationship with the woman as normal.
The woman, Megaspeed executive Alice Huang, has been described in news reports as a suspected Chinese intelligence asset. China has denied the reports, and no one has been charged.
Why Investors Are Watching
The main concern is key-person risk: Huang co-founded Nvidia in 1993 and has led it ever since. The company has no public succession plan and no obvious heir apparent, Bloomberg reported.
Not everyone expects lasting damage. Analysts cited by Inc. said the investigation was notable but did not expect a major impact on the shares.
The drop adds to a rough stretch. Nvidia hit a 52-week high of $243.37 on October 6 and is now about 27% below that level, though it remains above its March low of $164.27.
Key Numbers
Measure
Value
Friday close
$186.64
Monday early price
About $177
Day's low so far
$170.24
52-week high
$243.37 (Oct. 6)
52-week low
$164.27 (Mar. 30)
Market value
About $4.3 trillion
Price-to-earnings (trailing)
About 22
What to Watch Next
The next big test is earnings. Nvidia is confirmed to report third-quarter results on November 17 after the market closes, according to Earnings Whispers. Analysts expect earnings of about $2.47 per share, roughly double the $1.24 from a year earlier. Last quarter, Nvidia reported $96.2 billion in revenue, beating estimates of $92 billion.
Washington is also a factor. Three House committee chairmen have asked Huang to attend a closed-door briefing on November 18, the day after earnings, and he has until November 11 to respond.
President Donald Trump said he would "certainly take" Huang on his trip to Asia next week, the AP reported.