Nvidia Drops About 5.5% as Board Reviews Report on CEO, a Week Before Earnings

Nvidia shares fell about 5.5% on Tuesday, 10 November, closing near $168.80 and extending a two-day slide. The stock is now down nearly 30% from early October. The fall came on the same day a hot inflation report pushed the wider market lower, but the main driver was company-specific.

Peers moved the other way. AMD and Broadcom each gained about 3%, which suggests investors were moving money within the AI chip group rather than leaving it entirely.

What happened

A report by The Information alleged that chief executive Jensen Huang had a relationship, dating back to 2023, with a person it described as an alleged Chinese intelligence asset, and that this may have helped Chinese companies obtain around $7.5 billion of Nvidia chips. None of this has been proven. Reuters said it could not independently verify the report.

Nvidia's board has opened an independent investigation. That step is normal governance practice when serious allegations surface, but it creates uncertainty that markets dislike, especially for a company where export-control compliance is already under close watch.

Why it matters for traders

• Governance risk is hard to price. Unlike a revenue miss, an open investigation has no clear end date or size. That often widens the range of possible outcomes and pushes implied volatility up.
• Nvidia moves the indices. As one of the largest weights in the S&P 500 and Nasdaq, a 5% fall in Nvidia can cost the Nasdaq a meaningful share of a day's move on its own.
• Rotation within the sector. The gains in AMD and Broadcom show how pair and relative-value trades can work when one name has a specific problem.
• Two pressures at once. Rising rate-hike odds hurt high-valuation growth stocks in general, and Nvidia is facing that and its own headline risk together.

What to watch

• Nvidia's fiscal third-quarter results on 17 November. Guidance and data-centre demand will matter, but so will any comment from the company on the board review.
• Whether regulators or lawmakers in Washington take formal steps. Some reports mention further inquiries, but these are not yet confirmed.
• Options pricing ahead of earnings, which will show how large a move the market expects.
• Relative performance of AMD and Broadcom if the rotation continues.

Educational content, not investment advice. Practise trading earnings-season volatility risk-free in the Trading Titans paper trading app.