Wall Street has priced plenty of CEO scandals. It has never priced one at a company worth $4.5 trillion that makes up nearly 7% of the S&P 500 (^GSPC).
Nvidia (NVDA) CEO Jensen Huang admitted in a Nov. 8 memo to employees to an affair with Alice Huang, whom US intelligence officials believe worked for China’s Ministry of State Security. “I was unfaithful to my wife,” he wrote. The board has opened an independent investigation.
Nvidia stock fell 5% before the bell on Monday following the news.
186.64 +5.04 (+2.78%)
At close: November 6 at 4:00:00 PM EST
177.10 -9.54 (-5.11%)
The scale is hard to overstate. At Friday’s close, Nvidia was worth about four times the nine biggest companies ever hit by CEO personal-conduct scandals combined, by Yahoo Finance calculations. The largest, Intel (INTC), was worth $249 billion when Brian Krzanich resigned in 2018 over a past consensual relationship with an employee. Nvidia is about 18 times that.
This is key-person risk — the danger that a company’s value rests on one person — at its most extreme. Huang co-founded Nvidia in 1993 and has run it ever since, with no named successor.
Adjust for a bigger stock market, and the gap narrows but doesn’t close. No earlier scandal-hit company made up more than about 1% of the S&P 500, a mark only Intel in 2018 and HP (HPQ) in 2010 reached. Nvidia is about seven times that.
History puts a price on it. A 2018 study in the Journal of Financial Economics found stocks fell about 4% on average when the CEO was the one caught. At Nvidia’s size, that’s roughly $185 billion, more than McDonald’s (MCD) was worth when it fired Steve Easterbrook in 2019.
So far, Wall Street has treated Nvidia like the safe chip stock.
Since Oct. 28, the last close before The New York Times’ first spy report, Nvidia has fallen about 13%. The PHLX Semiconductor Index (^SOX) is down about 20% in a stretch that included a post-midterm rout. The gap holds from Nvidia’s Oct. 6 record too.
Spy stories can hit hard. Super Micro Computer (SMCI) lost 41% in a day in 2018 on a report of Chinese spy chips in its servers, a report that was never confirmed.
The closer precedent may be Intel’s Lip-Bu Tan. In August 2025, President Trump said Tan should resign over his China ties [1p link?]. Within a month, Washington had taken a stake in Intel and the stock was up about 20%.
This time, Trump is in the CEO’s corner. “I think he’s an honorable guy,” he told reporters Sunday.
Options traders were braced even before the admission. Friday’s prices implied a move of more than 3% either way for Monday alone, more than double Nvidia’s typical day lately.
