Key Takeaways
- Nvidia stock traded about 3.4% lower overnight, near $180, after its board opened an independent probe into reports that CEO Jensen Huang was the target of a foreign intelligence effort.
- The selloff lands on a stock already near its five-year-low forward P/E of about 15x, under half its 36x five-year average.
- China accounted for 9.1% of fiscal 2026 sales, and guidance excludes China data-center compute revenue. The broader risk is tougher Washington scrutiny of export licenses.
- November 17 earnings and the requested November 18 House briefing are the next checkpoints, but the board’s investigation is what decides Huang’s future.
Nvidia (NVDA) stock traded about 3.4% lower overnight, near $180, after the company’s board said on Sunday that it is opening an independent investigation into reports that CEO Jensen Huang was the target of a foreign intelligence effort. Reuters put the overnight price at about $180.30, against Friday’s Nasdaq close of $186.64. That erases all of Friday’s 2.78% rebound and puts the stock below Thursday’s $181.60 close.
A committee of independent directors, assisted by outside counsel, will run the probe. The board said it has no reason to believe national security or Nvidia secrets were compromised, and that it still has confidence in Huang. Huang also told staff in an email the same day that he had an affair with the woman at the center of the reports, Alice Huang, a former executive at Nvidia customer Megaspeed.
Why This Is Different for Nvidia
The New York Times reported on October 29 that US intelligence had concluded Alice Huang was passing information to Beijing. The Financial Times then reported that a US government memo described a romantic relationship between the two. Neither outlet has accused Jensen Huang of wrongdoing, and no charges have been announced.
For shareholders, the risk is the person, not the paperwork. Huang has led Nvidia since co-founding it in 1993. Analyst Dan Ives wrote that Huang could clearly be removed depending on what the board finds, though he expects Huang to stay on in the near term.
Nvidia Stock Was Already Cheap
The overhang lands on a stock that had already lost its premium. Nvidia’s forward P/E stood at 15.43x on Friday. That’s near its five-year low of 15.01x and well under half its 35.86x five-year average:
Hold earnings estimates steady and the overnight price works out to roughly 14.9x, below that five-year low. Most of the compression came before this weekend: Nvidia fell 9% on November 5 as post-midterm fears about AI rules and data-center permits hit chip stocks.
So the market was already pricing a slower AI buildout. Now a leadership question sits on top of it.
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The China Exposure Is Already Small
The obvious objection is that the probe invites tougher scrutiny of Nvidia’s China business. The numbers say there’s less left to lose than the headlines suggest. China has become a small slice of a business whose total revenue grew eightfold from fiscal 2023 to fiscal 2026:
(The bars need one caveat– In its October 2025 quarter, Nvidia switched from counting revenue by billing location to counting it by customer headquarters, so the fiscal 2026 bar isn’t on the same basis as the earlier ones)
On Nvidia’s new customer-headquarters basis, which recasts prior years, revenue from customers headquartered in China, including Hong Kong, fell from $25.05 billion, or 19.2% of sales, in fiscal 2025 to $19.68 billion, or 9.1%, in fiscal 2026.
Management’s outlook for the October quarter already assumes no China data-center compute revenue. Megaspeed’s footprint is harder to size. Its Malaysian sister company reportedly bought at least $4.8 billion of AI equipment with Nvidia chips from June 2024 to February 2026, but those purchases don’t show how much revenue Nvidia itself earned from Megaspeed.
The real exposure is Washington. Lawmakers are already asking whether Huang’s past assurances that chips weren’t being diverted held up, and that question bears on every future export license.
Nvidia’s Next Nine Days
Three dates will shape how big this discount gets. House committee chairs gave Huang until November 11 to accept a closed-door briefing on November 18 or propose another date. In between, Nvidia reports its October quarter on November 17, against a $108 billion revenue guide, plus or minus 2%.
At under 15x forward earnings, the stock already prices in a lot of bad news. The base case is that Huang stays and the business keeps compounding, which makes this selloff look overdone. The board has set no completion date, so its findings, not the congressional calendar, decide whether he stays. The update that would change that read is one that opens a successor search. That would raise leadership risk sharply, and 15x would stop looking like the floor.
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