NVIDIA Down 30% in a Month as Washington Questions Its Customer Screening

NVIDIA stock has fallen 30% in one month and closed the latest session at $160.26, down 4% from the prior close. The drop follows Jensen Huang's November 12 resignation as CEO, and it has turned a leadership shock into a Washington question about who actually ends up with NVIDIA silicon.

Huang's exit came after scrutiny of his ties to an executive linked to Megaspeed, a Singapore company that rents out NVIDIA chips. CFO Colette Kress has taken interim leadership while keeping her finance role, Bloomberg reported. The independent directors had already hired former Acting U.S. Attorney Jun H. Kim to probe whether foreign intelligence targeted Huang.

What does Bessent want to know?

Treasury Secretary Scott Bessent told CNBC on November 13 that the core issue is simple. He asked: "Did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage." He placed decisions on Megaspeed's access to NVIDIA hardware with the Commerce Department's Bureau of Industry and Security. He also repeated that China should not receive any NVIDIA chips above H100s.

NVIDIA's most concrete public answer came on its August 26 earnings call. Kress said: "In Q2, we shipped less than 1% of our total data center revenue in Hopper 200 products to customers based in China in accordance with U.S. government licenses." She added that the forward outlook carries no China data center compute revenue. That statement covers direct shipments. It does not explain how NVIDIA verifies the ultimate users of its customers' systems, which is precisely the gap Bessent's comments target.

Reuters has identified more than $3 billion in Chinese computing projects built around restricted NVIDIA processors. NVIDIA has not publicly reconciled that figure with its sub-1% disclosure.

How much was Huang worth?

Dan Ives of Yorkville Ives told Bloomberg TV that Huang was worth $1 trillion to NVIDIA's valuation. In per-share terms, Ives said: "The valuation without Jensen is $225 per share. With him, it's $300." He put NVIDIA two to three years ahead of China and its U.S. competitors, but conceded the departure "clearly evens the playing field." Yorkville Ives kept its Outperform rating.

Ed Yardeni took a different angle in a research note. He said Huang's exit raises concerns about NVIDIA's role in financing AI infrastructure. His base case, though, is that "NVIDIA's financing strategy remains intact," and he would treat any selloff as "another buying opportunity for the AI trade."

That strategy is unusual for a chip vendor. On the August 26 call, Kress said NVIDIA would help frontier AI labs access infrastructure funded by long-term institutional capital, while stating plainly: "We're not making loans." She described a model in which "we get paid twice: once on the hardware sale and again through the share of rental revenue, a highly recurring stream layered on top of a one-time equipment purchase." No independent verification of that recurring revenue stream exists yet.

What do the numbers show?

The bull and bear cases rest on the same balance sheet. The bears point to:

• Guarantee obligations capped at $108.5 billion for AI cloud and data center partners
• Days sales outstanding rising to 60 days from 45 days on extended payment terms

The bulls counter with Q2 FY2027 revenue of $96.22 billion, up 105.8% year over year, with data center revenue up 117%. Management guided Q3 FY2027 revenue to $108 billion, excluding any China data center compute sales.

The sector context softens the narrative slightly. Micron is down 20% over the past month to $758.04, and Marvell Technology is down 43% to $153.56. NVIDIA's decline is not an isolated event, though its scale and cause stand apart.

What happens next?

Two dates frame the near term. Huang agreed to testify in a closed-door House session before Thanksgiving. Commerce Secretary Howard Lutnick agreed to appear voluntarily before the Senate Banking Committee on December 10, putting NVIDIA's export approvals under a second spotlight. NVIDIA then reports Q3 results against its $108 billion guide.

Clear answers on customer screening could let NVIDIA's growth record reassert itself. Fresh evidence of chip leakage could compound the decline. Either way, volatility in the stock is likely to persist until Washington's review of NVIDIA's customer screening concludes.