Nvidia Loses $1 Trillion in Value in a Single Week

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First the midterms crash, then the espionage affair: within a single week, Nvidia has lost $1 trillion in market value.

Nvidia shares fell sharply again on Tuesday, trading at around $166 at the time of writing, down almost 7 percent and at their lowest level since late March. Over the week, the stock is down around 19 percent, and Nvidia’s market value has shrunk from nearly $5 trillion to around $4 trillion, according to Handelsblatt. Almost half of that loss is due to the affair of chief executive Jensen Huang: last Friday, before it became public, the stock closed at $186.64. Since then, it has fallen almost 11 percent, or around $490 billion in market value. On Monday, the stock had already dropped 4.3 percent after Huang’s admission and the start of an investigation by the board.

Microsoft Is Breathing Down Nvidia’s Neck

With a market value of around $4.02 trillion, Nvidia is still the world’s second most valuable company, but its lead over Microsoft, at around $3.96 trillion, has shrunk to around $60 billion, or 1.5 percent. One more weak trading day would be enough to push Nvidia into third place. Apple, at around $5.06 trillion, has pulled far ahead, followed by Alphabet at $3.5 trillion and Amazon at $2.9 trillion.

The slide is all the more striking because the rest of the market has recently been rising. According to The Motley Fool, Nvidia has lost around $1.7 trillion, or 30 percent, of its value since its record in early October, when it was worth $5.78 trillion. Part of that is due to the A.I. bloodbath after the U.S. midterms, the rest to the affair.

What Is Making Investors Nervous

Investors are mainly worried about the future of the company’s leadership. Huang has led Nvidia for 33 years, more than 60 managers report directly to him, and there is no designated successor. Nvidia’s own annual report explicitly lists its heavy dependence on long-standing leadership as a risk. Trending Topics has analyzed why the board can hardly remove its founder despite the espionage suspicions.

Meanwhile, the case is widening. President Donald Trump said at a White House press conference that the FBI is investigating. Behind this is the concern that Beijing may have tried to gain access to Nvidia’s most advanced AI chips, whose export to China is restricted, through Alice Huang, an executive at Singapore-based Nvidia customer Megaspeed. There is also a lawsuit: a private investor has accused Nvidia and Huang in a California court of concealing the affair and making false statements about the company’s relationship with Megaspeed. He is seeking class action status for everyone who bought Nvidia shares between October 9 and November 8. Bank of America has also removed the stock from its list of top picks, and Wells Fargo cut its price target from $315 to $300. Competitors have benefited: AMD and Broadcom each gained around 3 percent at the start of the week.

A Short Seller Saw It Coming

The issue did not come out of nowhere. In May, New York short seller Culper Research warned in a 40-page report about Nvidia’s "China problem" and an "uncomfortably close" relationship between Jensen Huang and Alice Huang. Culper estimated at the time that around 20 percent of Nvidia’s compute revenue came from China through illegal channels, for example via intermediaries in Southeast Asia, while Nvidia had put its China business at "zero." Megaspeed had allegedly been secretly financed by Alibaba through a series of shell companies, and its balance sheet had exploded from $33 million to $3 billion between 2023 and 2024. A former Nvidia employee quoted by Culper called Megaspeed the "tip of the iceberg." Culper holds a short position, and the stock has lost around 23 percent since the report.

Why Analysts Are Still Buying

Wall Street has not written Nvidia off, though. Most analysts are sticking with their buy ratings, including Wells Fargo despite its lower price target. Their argument: nothing has changed in the business. Revenue rose 106 percent to $96.2 billion last quarter, and around $108 billion is expected for the current quarter. Investor Gene Munster estimates that the current share price reflects a roughly 25 percent probability of Huang’s departure, while he himself considers 10 to 15 percent realistic. The next test comes as early as next week, when Nvidia reports its quarterly results.