Key Takeaways
- Nvidia shares fell 5.5% Tuesday after the board hired Wachtell, Lipton, Rosen & Katz to investigate Jensen Huang’s affair with a Megaspeed executive linked to Chinese intelligence.
- Second-quarter revenue rose 106% to $96.2 billion, and Huang said in August that “compute is revenue.”
- Dan Ives said investor chatter puts “roughly a 15% chance” on Huang’s removal, while AMD’s data center revenue jumped 97%.
- Nvidia reports November 17, one day before a closed-door House briefing that Republican chairs have requested.
Nvidia has lost about a quarter of its value in a month, and this week’s slide has little to do with chips.
NVIDIA (NVDA) shares fell 5.5% on Tuesday after a 4.3% drop on Monday that erased nearly $200 billion in market value. The selloff has now wiped out the stock’s gains for 2026.
Meanwhile, Advanced Micro Devices (AMD) just posted a 97% jump in data center revenue to $8.5 billion. So customers have a credible second source while Nvidia’s CEO sits under review.
A board probe shakes Nvidia
The trigger is Jensen Huang himself. On Sunday, he admitted in a memo to employees that he had an affair with Alice Huang, a former executive at chip buyer Megaspeed. U.S. officials have linked her to Chinese intelligence.
The board moved quickly. Its independent directors opened an inquiry on Sunday, and on Tuesday they hired Wachtell, Lipton, Rosen & Katz. Joon Kim, a former acting U.S. attorney in Manhattan, will lead it.
Here is where things stand:
- The board says it has no reason to believe Nvidia secrets or national security were compromised.
- Rosen Law Firm filed a shareholder class action against Nvidia and Huang in federal court in San Jose.
- Three House Republican committee chairs asked Huang to attend a closed-door briefing on November 18, and his reply is due today.
Dan Ives of Yorkville Ives & Co. said investor chatter assigns “roughly a 15% chance he is removed as CEO.” He expects the review to take four to six weeks, which leaves room for more headlines…
Much of the drawdown came before the memo, though. Election results had already triggered the stock’s worst day since January 2025 on November 5.
The demand engine keeps running
So far, nothing in the reported numbers points to trouble. Second-quarter fiscal 2027 revenue rose 106% to $96.2 billion, while Data Center revenue climbed 117% to $89.0 billion.
“Now, compute is revenue. And demand is accelerating,” Huang said in the August earnings release. Vera Rubin also entered full production, with racks already running at major cloud partners.
The gap with AMD is still huge. Nvidia’s quarterly Data Center sales are roughly ten times AMD’s, although AMD’s growth shows it is scaling fast.
How much of Nvidia now rides on one segment?
Data Center supplied about 92% of second-quarter revenue. Any customer hesitation tied to the probe would show up there first.
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Guidance now carries extra weight
Management guided third-quarter revenue to $108.0 billion, plus or minus 2%. That would be 12% above the second quarter and nearly 90% above the $57.0 billion reported a year earlier.
The outlook also assumes no Data Center compute revenue from China. That conservatism looks smarter now that China sits at the center of the probe.
Margins are the softer spot. Nvidia guided gross margin to 74.0%, a point below the 75.0% it just posted.
A one-point dip is modest. Even so, investors will want proof it stops there.
Capital returns offer some cushion. Nvidia returned about $26.0 billion to shareholders in the second quarter and had $99.0 billion left on its buyback authorization.
My take: The market is right to price in leadership risk, because Huang is the face of Nvidia’s customer relationships and roadmap. Still, the board’s early statement and the strength of demand argue against panic. I would wait for the investigation’s findings before selling, since this pullback looks driven mostly by fear.
The first real test comes November 17, when Nvidia reports after the close. A beat on the $108.0 billion guide, a steady margin outlook and calm answers on China would go a long way. The requested House briefing lands the very next day.
So what is NVIDIA stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
