Nvidia shares fell roughly 7% on Monday after CEO Jensen Huang admitted to having an extramarital affair and the company said it was investigating reports he was the “target of a foreign intelligence effort.”
The developments come at a rocky moment for the AI boom, with tech stocks sliding sharply in recent weeks over concerns about the sustainability of the data center buildout.
The Dow, S&P 500 and Nasdaq opened higher on Monday, buoyed by a rebound in shares of other companies. But Nvidia shares dropped, extending a recent bout of weakness.
Nvidia shares (NVDA) are down more than 20% from their peak a month ago and last week erased their gains for this year. The tech-heavy Nasdaq Composite on Thursday closed in correction, down more than 10% from its peak one month ago.
Nvidia, which makes semiconductor chips, has been at the heart of the AI bull market over the past four years. Huang has been one of AI’s main cheerleaders, with enormous influence over Wall Street’s outlook for the boom.
The investigation into Huang and allegations of a foreign intelligence effort raise serious questions for the company at the center of the buildout with deals across major tech companies and adds to heightened tensions between the United States and China.
“While the Board has no reason to believe that either national security or NVIDIA secrets were compromised, the Board’s inquiry will examine all available information,” Nvidia said in a statement Sunday.
“I am committed to protecting NVIDIA and supporting America’s national security,” Huang said in a separate note to Nvidia staff.
This is a developing story and will be updated.
Source: edition.cnn.com