Nvidia shares fell sharply Monday, Nov. 9, after the Santa Clara chipmaker's board opened an independent investigation into CEO Jensen Huang, who admitted to an affair with a businesswoman U.S. intelligence agencies say has been passing information to Beijing.
The stock dropped almost 7.5% at the opening bell to $172.75, down from $186.64 at Friday's close, a seven-month low that wiped roughly $335 billion off the company's market value, The Guardian reported. CNBC reported the shares were down about 5% later in the morning.
Why it matters: Nvidia is the world's most valuable company and a pillar of the Bay Area economy. It ended last week worth about $4.5 trillion, according to The Guardian.
What's behind it
The New York Times and the Financial Times reported that U.S. intelligence agencies say Alice Huang, an executive at cloud company MegaSpeed, has been passing information to Beijing, CNBC said. Nvidia said Huang "fully supports the review and has committed to cooperating with it."
In an email to staff, Huang wrote: "I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry." China's Foreign Ministry called the "so-called Chinese spy narrative" unsubstantiated, CNBC reported, citing Reuters.
Reaction
President Donald Trump called Huang "an honorable guy" on Sunday and said "he's done an amazing job for our country." Analyst Dan Ives of Yorkville Ives & Co. told CNBC the episode is a "black eye moment" for Huang but said talk of replacing him is "comedy."
The broader market rose. The Dow was up about 1.3% and the Nasdaq about 2% in early trading, helped by a 4.7% drop in oil prices, The Guardian reported. Other chip stocks, including AMD, Intel and Qualcomm, also climbed, according to CNBC.
What's next: Nvidia reports third-quarter earnings on Nov. 17.
Related: Nvidia board opens probe of Jensen Huang and Google unveils new AI chips.