Nvidia’s shares slumped as much as 8% on Monday, briefly putting $350 billion of market value at risk, after the company disclosed an investigation into CEO Jensen Huang’s alleged relationship with a business executive believed to be recruited by China’s Ministry of State Security. The board announced an independent probe, while Huang admitted to an extramarital affair, apologized to employees, and pledged cooperation. The stock fell to $179.34, breaking below its 50‑week exponential moving average of about $199, and testing support levels near $164 and $150.

Market reaction and broader impact

Despite the sharp Nvidia decline, the S&P 500 rose 1.48% and the Nasdaq gained 1.87% on the same session, indicating investors treated the episode as largely company‑specific. However, Nvidia’s weight in the SPDR S&P 500 ETF—approximately 6.93%—means a 5.6% drop in the chipmaker alone would shave roughly 0.39 percentage points from the index’s performance, according to Decrypt. Other semiconductor stocks rallied, suggesting the broader AI trade remains intact for now.

Succession concerns and analyst views

Huang, a co‑founder who has led Nvidia since 1993, built a highly centralized management structure and maintains key relationships with customers, suppliers, and governments. Analysts cited by Decrypt, including Chris Weston of Pepperstone and Dan Ives of Yorkville Ives & Co., expressed doubt that Huang would resign but warned that any forced departure would create a “bloodbath” for the stock. The lack of an obvious successor amplifies the risk, as replacing a figure who shaped Nvidia’s AI hardware dominance is far more complex than swapping a typical CEO.

Technical outlook and valuation erosion

Nvidia’s market cap fell from roughly $5.78 trillion on Oct. 6 to $4.51 trillion on Nov. 6, a loss of about $1.27 trillion before the board’s public announcement, per YCharts. The weekly chart shows the price trading below the 50‑week EMA, a bearish signal that had already been forming prior to the scandal. Key technical levels identified by Decrypt include an intraday low of $170.24, a prior 52‑week low at $164.27, and a psychological support zone around $150. A recovery above $190 and back over the EMA would improve the outlook, but the weekly candle remains open, leaving the direction uncertain.

What to watch next

Investors should monitor the board’s investigation findings, any statements from U.S. intelligence agencies, and whether the company announces a formal succession plan. Further price action around the $164 and $150 support zones will signal market sentiment, while broader AI sector trends and semiconductor earnings could either cushion or exacerbate Nvidia’s volatility.