Nvidia’s $4.51 Trillion Value Faces an Inquiry Into Its CEO

By Rebecca Stone

Nvidia entered Monday with a $4.51 trillion market value, its Friday close 22% below its record, and founder and CEO Jensen Huang facing an independent board investigation.

At 2:59 p.m. ET Sunday, Nvidia’s board said in a six-sentence statement: “The NVIDIA Board is 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, with outside counsel, will conduct the review.

The board said it had “no reason to believe that either national security or NVIDIA secrets were compromised,” and expressed confidence in Huang and his leadership team. It named no committee members, outside counsel or timetable, although Huang said he would support the review and cooperate fully.

In a letter to employees obtained by Axios, Huang wrote: “I owe my family and all of you an apology. 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.” He also took full responsibility and described leading Nvidia as the privilege of his life.

Axios and Bloomberg reported, following October stories in The New York Times and Financial Times, that Huang’s relationship was with a woman whom U.S. intelligence officials suspected of working for Beijing. The allegation concerns Huang’s conduct; the official record establishes no compromise of Nvidia or national security.

Nvidia’s John Rizzo said in a statement carried by Axios that the news would not slow Nvidia and that Huang would continue as CEO without interruption. Nothing in the record says the business changed, and Nvidia still reports third-quarter results on Nov. 17; those results address operations, while the board has set no date for the inquiry.

What does the investigation change?

Nvidia closed Friday at $186.64, after a 9.26% Thursday decline in the chip sector and a 2.78% Friday rebound. The Oct. 6 record close was $239.24.

Consider a hypothetical investor: a 67-year-old retired engineer with 1,000 Nvidia shares in a taxable brokerage account. He bought them at the June 10, 2024 close of $121.79, the day Nvidia’s 10-for-1 split took effect, for $121,790.

At the record close, the position was worth $239,240; at Friday’s close, $186,640. The gain remained $64,850, or 53.2%. The same retiree holds $1,100,000 in a rollover IRA and receives $3,400 a month in Social Security, making Nvidia 14.5% of a $1,286,640 portfolio.

• A 5% drop: Nvidia would trade at $177.31 a share. The position would fall to $177,308, a loss of $9,332, or about 2.7 months of Social Security.
• A 10% drop: The share price would be $167.98. The position would lose $18,664, or about 5.5 months of Social Security, while Nvidia would shed $451 billion in market value.
• A 20% drop: The share price would be $149.31. The position would lose $37,328, or about 11 months of Social Security, while the company would shed $901 billion.

Even the 20% case leaves the retiree $27,522 ahead of the original purchase price. Thursday’s decline alone cost the position $18,530.

Huang has more riding on the stock. He owns 870,604,104 shares, or 3.58% of Nvidia, according to the company’s 2026 proxy statement. At Friday’s close, that stake was worth $162.5 billion, and a 10% decline would cost him $16.2 billion.

How large is the key-person risk?

Nvidia’s annual reports have said for years that the company depends on its senior leadership, and no successor to Huang has been named publicly. The board chose an investigation rather than an immediate leadership change, indicating that directors want facts before deciding Huang’s future role.

Two factors cut against an immediate governance discount. Fifty-nine of the 62 analysts in Fuse’s count rate the stock a buy or strong buy, with an average target of $327.14, about 75% above Friday’s close. Those analyst targets rest on orders and margins, neither of which the board statement changes.

What do selling, holding and trimming cost?

• Sell all 1,000 shares: Doing so at Friday’s price realizes a $64,850 long-term gain because the shares have been held for more than a year.
• Pay the tax: For a married couple whose 2026 taxable income, with the gain included, remains below $613,700, the federal rate would be 15%, producing a $9,728 bill. If modified adjusted gross income exceeds $250,000, the 3.8% net investment income tax applies to the portion above that threshold; the tax reaches $15,434 at the full 23.8% rate.
• Hold all 1,000 shares: The investor accepts a Monday price set by headlines and an investigation with no stated end date.
• Trim 500 shares: The sale would raise $93,320, realize a $32,425 gain and generate about $4,864 of tax at 15%. The remaining 500 shares would also be worth $93,320, reducing Nvidia to 7.3% of the portfolio. If the stock then fell 20%, those retained shares would be worth $74,656 and the sale would spare the investor $18,664. If Nvidia recovered toward the analyst target, half the original position would still participate.

Shares held in an IRA would create no tax bill on a sale today, leaving concentration as the central issue.

The three price scenarios are arithmetic, not forecasts. Nvidia’s 9.26% Thursday fall had nothing to do with Huang, so part of Monday’s move belongs to the chip sector; the tax examples assume married filing jointly and cover federal tax only; and the foreign-intelligence allegation remains unproven.

The next dated test arrives Nov. 17, when Nvidia reports third-quarter results. Orders and margins support the operating case, but the inquiry has no end date, leaving the share price more exposed to headlines than to the numbers awaiting release.