Key Takeaways
- NVIDIA fell 18% from its Nov. 3 close to its Nov. 10 close as a post-midterms chip selloff ran into a growing scandal around CEO Jensen Huang.
- A report that a network tied to Alice Huang moved $7.5 billion of NVIDIA chips into China brought the company’s sales into the scandal.
- Tighter export rules would cost far more, and would reach AMD and TSMC too.
- The stock is at a five-year low on forward earnings, but the bigger question is now whether Huang stays.
NVIDIA (NVDA) lost 18% in a week, from its Nov. 3 close to its Nov. 10 close. On Sunday, Nov. 8, its board said it’s investigating reports that CEO Jensen Huang was the “target of a foreign intelligence effort.”
By Tuesday, Nov. 10, the scandal had reached NVIDIA’s China sales, and Washington’s response could hit Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSM) too.
The scandal reached NVIDIA’s sales
Democrats swept Congress in the Nov. 3 midterms, and chip stocks sold off on fears of tighter AI rules and slower data center construction. Then the news turned to NVIDIA alone. Huang admitted in a Nov. 8 memo that he had been unfaithful to his wife, after reports linked him to Alice Huang, a former executive at NVIDIA customer Megaspeed. On Tuesday, The Information reported that a network tied to her had moved at least $7.5 billion of NVIDIA’s chips to Chinese companies since 2023, a figure NVIDIA hasn’t confirmed. Even taken as one lump, that’s under 4% of the $215.9 billion NVIDIA brought in during the year ended January 2026 alone.
New export rules would cost far more. House Foreign Affairs chair Brian Mast told ABC News on Nov. 10 he was ready to subpoena Huang if he didn’t respond to a briefing request by Nov. 11. AI clouds, industrial and enterprise buyers were 45.3% of NVIDIA’s data center sales in its July quarter, and that’s where tighter rules on overseas clouds would land.
AMD and TSMC share that exposure. AMD’s data center revenue grew 97% in its third quarter on record Instinct GPU and EPYC CPU sales, and those GPUs face the same rules. TSMC’s October revenue rose 59.7% from a year earlier, and its wafer orders track NVIDIA’s demand.
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Cheap for a reason
Analysts still see normalized EPS reaching $15.93 in the year ending January 2028:
The China report shouldn’t dent that much, since NVIDIA’s outlook already leaves out China data center compute revenue.
As of Nov. 9, the stock was at 15x forward earnings, a five-year low against a 36x average:
Cheap, sure. But the question has moved past what the probe finds. On Nov. 11, The New York Times reported that Huang also had a relationship with Kimberly Powell, NVIDIA’s vice president of health care, who reports to him, and The Wall Street Journal reported the board was preparing to oust him. Shares had closed up 2.87% that day, then fell sharply after hours. Baird downgraded the stock to Neutral that day. The board met that night, but no decision had been announced by Thursday morning, Nov. 12, when Bernstein downgraded the stock to Market Perform from Outperform and halved its price target to $200 from $400.
That matters because, as Gary Black of The Future Fund has pointed out, Huang has no natural successor inside the company. Until the board says who runs NVIDIA, the 15x multiple is pricing a leadership question, not an earnings one. NVIDIA reports its third quarter on Nov. 17, the first chance to hear whether any of this is reaching orders.
So what is NVIDIA stock actually worth?
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