Nvidia shares fell more than 5 percent on Monday after the company's board launched an investigation into CEO Jensen Huang's relationship with a woman identified by U.S. intelligence agencies as a Chinese spy.
The stock dropped 5.75 percent in after-hours trading to around $175.97, down from Friday's closing price of $186.64, according to reports. The decline wiped out nearly $200 billion in Nvidia's market value, though other reports put the loss at $330 billion.
Huang admitted to the affair in an email to employees on Sunday and apologized. He wrote that he had been unfaithful to his wife and said, "To my colleagues at NVIDIA, including those I have worked alongside for decades, and to our board, partners, and shareholders around the world: you deserve better from me."
The board of directors has started an independent investigation led by a committee of independent directors. The probe focuses on whether Huang was targeted by a foreign intelligence operation.
The woman, named Alice Huang in reports, is a Chinese businesswoman. U.S. intelligence agencies have determined she is a Chinese spy, according to a person with knowledge of the matter. The two Huangs are not related.
Despite Nvidia's troubles, the broader stock market surged Monday. The Nasdaq 100 rose 3.4 percent, the S&P 500 gained 2.3 percent, and the Dow Jones Industrial Average climbed more than 1,100 points. Oil prices dropped more than 4 percent on news of U.S.-Iran talks, helping lift markets.
Other chipmakers like AMD, Qualcomm, Taiwan Semiconductor, and Intel all rose along with the market. Nvidia was the biggest loser on both the Dow and the S&P 500.
Chris Weston, head of research at brokerage Pepperstone, said the situation adds uncertainty for Nvidia shares but that an immediate leadership change appears unlikely. "If we genuinely thought he was going to step down ... the stock would be down - it would be an absolute bloodbath, to be honest," he said.
Huang's daughter, Madison Huang, who is also an Nvidia executive, canceled scheduled meetings with South Korean technology companies, citing unavoidable internal issues.
The investigation continues, and analysts caution it could affect semiconductor investments across multiple regions.