Nvidia shares were slightly higher in premarket trading Tuesday as investors continued to weigh the potential fallout from CEO Jensen Huang‘s affair with an alleged Chinese spy.
Nvidia shares closed more than 4% lower on Monday, the day after Huangtold staff in an emailthat he had been “unfaithful” to his wife and had “fallen short” of his responsibilities as CEO.
He reportedly had an affair with Alice Huang, an executive at Megaspeed, an Nvidia customer. The New York Times on Oct. 29 reported that U.S. officials had concluded she was “a Chinese intelligence asset, funneling information to Beijing” and “possibly steering advanced Nvidia A.I. chips to China.”
U.S. President Donald Trump said Monday that the FBI is investigating.
“I’ve been reading a little bit about it over a period of time, but not too long ago,” Trump told reporters at the White House. “We’ll look into it. I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape.”
The stock was trading 0.6% higher as of 6:25 a.m. ET, paring earlier gains.
Nvidia shares over the past five days.
Adding to the tech giant’s woes was a class-action shareholder lawsuit filed against Nvidia and Huang in federal court in San Jose, California.
The Rosen Law Firm’s suit alleges the defendants made false or misleading statements about his affair with Huang and Nvidia’s relationship with Megaspeed, thereby presenting a material risk to the company’s reputation and business prospects.
“Right now the Street and investor chatter is assigning roughly a 15% chance he is removed as CEO of Nvidia with a high probability (85%) he stays on as CEO after the Board investigation is completed,” said Dan Ives, senior and managing director at Yorkville Ives & Co, in a Tuesday note.
“We would expect a Board investigation that could take 4 weeks to 6 weeks and will create a clear overhand on the stock until more news emerges from Nvidia.”
— CNBC’s Dan Mangan helped contribute to this report.