Microsoft overtakes Nvidia as CEO affair fallout deepens

Nvidia ↘ 5.47% fell into a bear market after shares closed at $178.67 on Monday, November 9. That is more than 26% below the 52-week high of $243.37 and erases about $1.57 trillion in market value, NDTV Profit reported. The loss is larger than the whole market value of Tesla ↗ 0.46%. The selloff comes from two pressures at once: a board investigation involving CEO Jensen Huang and growing doubts about AI spending, about a week before the company reports earnings on November 17.ndtvprofit.com

The losses continued on Tuesday. Shares fell more than 6%, putting Nvidia on track to lose over $470 billion in value across two sessions, Reuters reported. The drop let Microsoft ↘ 2.20% pass Nvidia as the world's second-most valuable company for the first time since June 2025.reuters.com

The board probe

On Sunday, November 8, Nvidia's board said it was "initiating an independent investigation in light of recent reporting that founder and CEO Jensen Huang has been the target of a foreign intelligence effort." A committee of independent directors, working with outside counsel, will lead it, Investor Daily reported. The board said it had no reason to believe national security or company secrets had been compromised, and that it still has confidence in Huang.investordaily.com.au

The probe follows an October 29 report in The New York Times ↗ 0.57%. It said U.S. intelligence had concluded that Alice Huang, an executive at Singapore-based Megaspeed, was passing information to Beijing, according to ABC7. China called the report "baseless and purely slanderous smears." In a memo to employees, Huang wrote, "I was unfaithful to my wife… There is no excuse for what I did," Yahoo Finance reported. President Trump said the FBI is looking into the relationship.abc7news.com+1

On Tuesday, The Information reported that the relationship helped move at least $7.5 billion worth of Nvidia chips to Chinese firms. Reuters said it could not independently verify that report.

AI spending fears

Nvidia was already down about 22% from its October 6 record close before Monday's session. Chip stocks sold off heavily after the midterm elections, where many winning Democrats ran on platforms opposing AI and data centers, The Star reported. Nvidia now trades at 13 times forward earnings, down from more than 32 times a year earlier.thestar.com.my+1

Earnings ahead

For the third quarter, Nvidia has guided to revenue of $108 billion, plus or minus 2%. That follows second-quarter revenue of $96.2 billion, NDTV Profit noted. Republican House committee chairs have also asked Huang for a closed-door briefing on November 18.finance.yahoo.com+1

Morningstar ↗ 0.13% kept its $310 fair value estimate for the stock, according to Investor Daily. Bank of America ↗ 0.26% analysts summed up the main question for investors: "The investment debate is whether this remains company-specific or triggers restrictions and disruption across AI infrastructure. We would not equate allegations with proven business damage".investordaily.com.au+1