Nvidia: Shares fall significantly after CEO Jensen Huang admits to affair

These are turbulent times for investors. Concerns about an end to the AI ​​boom in the USA have recently put tech stocks under pressure.

At Nvidia there are other uncertainty factors. An internal investigation was launched against CEO Jensen Huang because of an affair with a suspected Chinese agent.

The AI ​​chip manufacturer's share price slipped at the start of the week in Frankfurt trading. The papers temporarily fell by a good six percent. In pre-market US trading they were 4.2 percent weaker.

The affair is putting the founder of the $4.5 trillion company under increasing pressure. ‌Analysts now see a risk ‌to Huang's position ‌at the top of the group.

The Board of Directors has launched an investigation into the matter. In an initial statement, the panel said there was no reason to believe that national security or company secrets had been compromised.

Analyst Stacy Rasgon from Bernstein Research wrote that regardless of the truth, the idea that the Nvidia boss could have been the target of an espionage operation is disturbing. The matter casts a very bad light on Nvidia.

Markets in Asia are stabilizing

The news hits the technology sector at an already turbulent time.

The Democrats' victory in the US midterm elections had sparked fears among investors about more AI regulation. On Monday there were signs of a recovery on the Asian stock exchanges and also in the Dax. But the turbulence at Nvidia is putting a damper on things.

The Dax stabilized on Monday and was slightly positive. “The first shock after the US midterm elections seems to have been overcome,” said Andreas Lipkow, chief market analyst at broker CMC Markets. Many investors now viewed the significantly lower prices as attractive entry opportunities again, which is why an initial countermovement could begin.

Last week, fears of stricter regulation of the AI ​​industry by the Democrats, who had regained strength in the midterm elections in the USA, caused stock markets around the world to slide. A strong wave of selling swept over tech stocks in particular. The Dax lost almost two percent on Friday.

Jochen Stanzl, chief market analyst at Consorsbank, believes the AI ​​crisis is not yet over. “Even if we see a stabilization in the prices, we can see a growing AI fatigue among investors,” said the expert. »They are no longer lured by big promises in order to pay for all the assessments, but rather want to see results.«

The stock markets in Asia also started the new week with some significant gains. The most significant gains were in Taiwan, where the market benefited from measures taken by local authorities to restore investor confidence, such as imposing restrictions on short selling. In Japan, the Nikkei closed significantly higher at 2.3 percent.