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After posting back-to-back heavy losses, Nvidia shares saw renewed buying interest in Wednesday's trade, rebounding nearly 4.5% to hit an intraday high of $176.23, as investors appeared encouraged by the solid results reported by artificial intelligence (AI) company CoreWeave.
The rebound, if sustained through the close, could help the stock recover some of its recent losses, which wiped out nearly $500 billion in market capitalisation over the previous two trading sessions and pushed CEO Jensen Huang down to 12th position on the Forbes list of the world's richest people.
Nvidia's board has reportedly launched an investigation into allegations involving Jensen Huang and a woman whom US intelligence officials believe was working for Chinese intelligence. The board has reportedly hired former US Attorney Joon H. Kim and law firm Wachtell Lipton to investigate alleged shipments of export-restricted chips to China.
Megaspeed, currently owned by a shell company registered in the names of two Singapore citizens, is suspected of having served as a front to procure export-restricted chips for China.
According to The Information, Jensen Huang's years-long ties to Alice Huang may have helped facilitate the sale of at least 240,000 Nvidia chips to China since 2023, with an estimated value of $7.5 billion.
The publication also reported that Alice Huang, who served as Megaspeed's managing director for eight months in 2023, used a network of companies to purchase and reroute Nvidia chips, primarily H100 and H200 processors, to China.
Alice Huang, also known as Huang Le, is not related to Jensen Huang. A former television reporter in China, she later became a senior executive at Megaspeed, a Singapore-based data centre company and one of Nvidia's biggest customers in South-east Asia.
Nvidia shares had been under pressure even before the latest controversy, as investors increasingly questioned the sustainability of the AI trade and the hundreds of billions of dollars in capital expenditure being committed to building AI infrastructure.
The stock came under further pressure after the US midterm elections delivered a setback to candidates and initiatives supporting AI data centre construction. Nvidia is now on track to record its sixth consecutive weekly decline, something it has not experienced since 2012.
The shares have fallen 29% since hitting a record high on October 6, bringing the company's market capitalisation down to around $4 trillion from $5.8 trillion a month ago.
This earnings season has highlighted investors' growing concerns about AI spending, particularly among companies reporting negative free cash flow, including Alphabet Inc., Meta Platforms Inc. and Amazon.com Inc.
These three companies account for approximately 23% of Nvidia's revenue, according to supply-chain data compiled by Bloomberg. Their shares all declined after their latest earnings reports highlighted rising capital expenditure on AI infrastructure.
The possibility that these so-called hyperscalers could scale back their spending has gained further significance following last week's election victories by candidates opposing data centre development in key states such as Texas.
Any hurdles in building AI infrastructure could ultimately weigh on Nvidia's growth outlook, according to the report.
The latest sell-off comes ahead of Nvidia's quarterly earnings announcement, scheduled for November 17, 2026.
Investors will closely examine the company's financial performance, revenue outlook and management commentary for clues about whether the massive investments in AI infrastructure will continue to translate into sustained demand for its advanced processors.
The results are expected to serve as an important test of investor confidence as Nvidia navigates mounting market pressure, concerns over the sustainability of AI spending and the controversy surrounding its leadership.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends.
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