Key Takeaways
- NVIDIA fell 6% after a report that a network tied to Alice Huang moved at least $7.5 billion of its chips to Chinese firms.
- The dollars are small next to NVIDIA’s sales; tighter rules on overseas AI clouds would cost more.
- The real risk is that there’s a real possibility of more bad news to come…and congressional investigations.
NVIDIA (NVDA) is down 6% today after The Information reported that a network tied to Alice Huang, the suspected Chinese spy CEO Jensen Huang admitted to an affair with, moved at least $7.5 billion of NVIDIA chips to Chinese firms since 2023.
This time the scandal reaches NVIDIA’s sales, and new export rules wouldn’t stop there.
Washington matters more than the $7.5 billion
One of the network’s companies, Shanghai Century Litong, got preferred cloud partner status from NVIDIA in 2023. The network reportedly moved about 240,000 processors, including restricted H100s, often through Southeast Asian data centers that rented their computing power to users in China. Spread over nearly three years, the $7.5 billion is less than 4% of the $215.9 billion NVIDIA sold in the year ended January 2026 alone. New rules on overseas clouds could cost far more: AI clouds, industrial and enterprise buyers made up 45.3% of data center revenue in the quarter ended July 26. NVIDIA already narrowed that channel on Nov. 4, telling cloud clients to cap their Chinese business at 49%.
AMD and TSMC have a stake in this too
Advanced Micro Devices (AMD) can look like a winner here, but its Instinct GPUs face the same export rules, so I think that view counts only the upside from NVIDIA’s trouble. Taiwan Semiconductor Manufacturing (TSM) reported October revenue up 59.7% from a year earlier. Its wafer orders follow NVIDIA’s total demand, so the question for TSMC is whether new rules shrink what overseas clouds buy.
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Cheap, but for extremely good reason
Analysts expect normalized EPS to climb to $15.93 in the year ending January 2028.
Today’s report shouldn’t cut those estimates much, since management already assumes no China data center revenue in its outlook. And the stock was at 15x forward earnings at Monday’s close, its lowest in five years and far below its five-year average of 36x.
“It’s cheap!” you might say, and it is…
But for me the bigger problem is that, very simply, we’re very early in this story, and there’s already a lot of bad news getting reported. I would be surprised if there wasn’t more. At this point I’d consider Jensen a roughly 50/50 shot to remain CEO a year from now, and if more bad news pile up those odds get worse.
And Nvidia without Jensen probably deserves a re-rating (plus bigger questions about the overall AI ecosystem).
So what is NVIDIA stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what NVIDIA could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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