TORONTO - Should you sell your Nvidia shares? It’s a question on the minds of investors around the world as allegations of adultery swirling around Nvidia co-founder Jensen Huang this week sent the company’s stock into a tailspin.
Nvidia, the global leader in high-quality chips, powering AI development around the world, has seen its share price drop roughly 18.8 per cent over the past week, falling from US$203.82 all the way to $166.19 per share following Huang’s sudden resignation on Thursday.
Some investors in Canada have told CTV News that the whole ordeal has pushed them to sell.
“This stock has always been a safe place for a lot of people, to see that it’s shifted so dramatically, it’s really scary so I decided to pull out and sell most of my shares,” said Chanel Dean who, like many Canadians works hard to scrape together some savings to invest.
Jensen Huang is accused of having an extramarital affair with Alice Huang, who the U.S. intelligence have labelled a Chinese spy.
The former CEO Huang is also alleged to have had an affair with Nvidia’s Vice-President of Healthcare, Kimberly Powell.
Media reports suggest that (He) Huang may have also had another, unnamed employee.
Nvidia’s board of directors announced in a statement today that Huang has resigned and is now (no) longer with the company “effective immediately.”
How will stocks be effected?
A tech analyst, who spoke to CTV News, believes the market is, in-part, overreacting.
“Nvidia has already sold everything they plan to make for the next year and a half. That’s not going to change. All of their product plans and strategies for the next couple years… they discussed publicly, that doesn’t change," TECHnalysis Research President, Bob O’Donnell said.
“The real question is what happens in 2028 and 2029 when decisions being made today impact the future,” he added.
Though for regular Canadian investors like Dean, watching her savings disappear is difficult to stomach.
“Huang as CEO was the person who built so much of (Nvidia) so that changes my position on how I feel about investing in this company going forward,” Dean added.
O’Donnell is not as concerned, telling CTV News that he believes “Jensen did an amazing job laying the groundwork for the company.” He added that Jensen Huang did a great job “not just (with) the chips, but in the software the entire ecosystem (runs on) as well as (with) all the deals he already brokered with AI companies.”
‘The stakes are enormous’
Other industry observers say this scandal is about much more than just the price of a Nvidia share.
Huang is part of U.S. President Donald Trump’s inner circle, and the former CEO’s reported affair with an alleged spy from China raises multiple national security questions.
“The U.S. establishment sees themselves in a struggle with China for world dominance. Winning the AI race is going to be the key to being the world hegemon for the rest of the 21st century,” said Carleton University business analyst, Ian Lee.
“The stakes are enormous, they’re just gigantic.”
Alice Huang is the former executive of a Singapore-based computing company called Megaspeed, that buys and uses Nvidia chips. The company also rents out computing space to Chinese companies. Megaspeed was already being investigated by the U.S. government for smuggling the extremely valuable chips into China.
U.S. intelligence agencies have concluded that Alice Huang was spying for China, though the details of their investigation remain classified.
The disgraced co-founder of Nvidia is expected to be called to testify in front of the U.S. Congress where he will answer questions while under oath for the national security fiasco he now finds himself embroiled in.
