On Monday, NVIDIA (NVDA) shares fell below $172 at the open before buyers stepped in. NVDA stock closed at around $178.67. On the weekend, CEO Jensen Huang issued a memo to the company apologizing for an affair.
The New York Times reported that U.S. surveillance indicated Alice Huang passed sensitive information to Beijing. The paper noted that the supposed spy worked as a television reporter in China. Afterward, she became an executive at Megaspeed. This firm ran data AI server systems. Furthermore, the Times reported that the company bought over $4.8 billion in Nvidia chips over a two-year period.
Nvidia shareholders are most worried about two things. First, CEO Jensen Huang advocated to the U.S. President to allow the company to sell GPU chips to China. If he had known that the woman was a spy, it would create tremendous political risks for NVDA stock.
Secondly, Nvidia kept selling chips to Megaspeed after the Commerce Department investigated whether the firm helped facilitate imports of restricted AI chips into China.
Instead of letting NVDA stock drag markets lower, investors chose to bid chip stocks higher. AMD (AMD) jumped by 13.26%, Broadcom (AVGO) rose by nearly 9%, and Intel (INTC) climbed by 5.49%.
Expect NVDA stock to attract bargain hunters. They are betting that the stock bottomed. A rebound would require the government to find that CEO Huang was not aware of Megaspeed’s connection with the Chinese government.
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