Nvidia shares fell 5.5% on Tuesday, 10 November, closing at $168.89 as the fallout from an investigation into chief executive Jensen Huang deepened. The drop followed a 4.3% fall on Monday and left the chipmaker down 9.6% so far this week, at its lowest level since late March.

Investors have now seen more than $430 billion wiped off Nvidia's stock market value over the past two days, as concerns mount over the fallout from Huang's affair with a Chinese businesswoman alleged to be a spy for Beijing. The company's board has launched an independent investigation, while the FBI is examining whether Huang was targeted by a foreign intelligence operation.

What is behind the sell-off

The Information, a business publication, reported that the relationship helped facilitate shipments of at least $7.5 billion worth of Nvidia chips to Chinese firms. Alice Huang, an executive at Megaspeed, a Singapore-registered company, is alleged to have used the relationship to gain inside knowledge of the company, whose most powerful AI chips are banned from sale in China. Huang has denied knowing that the businesswoman was a spy, according to Bloomberg.

The headlines have worsened over the past 24 hours. A federal investigation into Megaspeed was transferred from the Commerce Department to the Justice Department last year, the New York Times reported. The Rosen Law Firm has also filed a proposed class-action lawsuit in a federal court in San Jose, California, accusing the company and Huang of misleading investors over failures to disclose potential national security risks linked to the affair.

President Donald Trump said on Monday that the FBI was looking into the affair, adding that he had spoken with Huang since the allegations were first reported. Three US House committees have requested a briefing with Huang ahead of Nvidia's earnings report on 17 November.

Analysts and investors react

Citi analyst Atif Malik reiterated his buy rating on Nvidia on Tuesday but cut his price target to $285 from $315. Bank of America analysts described the latest events as an "overhang, not yet an earnings event", while Nvidia's board said it had "no reason to believe that either national security or NVIDIA secrets were compromised". Huang will remain chief executive during the investigation.

Not every investor is selling. Cathie Wood's ARK Invest bought 90,443 Nvidia shares on Monday, worth at least $15.4 million, according to company records. Nvidia is set to report its latest results next week, and many investors say that report, rather than the scandal, will decide the stock's next move.

Wider market context

Hot US inflation data added to the pressure on Tuesday. Consumer prices rose 0.4% in October, above the 0.3% forecast, lifting expectations that the Federal Reserve will raise interest rates in December. The Nasdaq fell 0.7% and slipped below its 200-day moving average, the S&P 500 fell 0.4%, and the Dow Jones Industrial Average dropped 157 points, or 0.3%.

Technology was the weakest area of the market. Server maker Dell fell 4.8% on the day, chip firm Sandisk dropped 4.5%, and smaller AI infrastructure firms under pressure included Iren, down 10%, and Nebius, down 7%.