The latest alleged Nvidia (NASDAQ: NVDA) honeytrap scandal is already having an adverse impact on the stock by press time on the morning of Monday, November 9.
Specifically, NVDA shares dropped 4.30% from their latest close at $186.64 in the extended session and are changing hands at $178.61 following the revelation that CEO Jensen Huang cheated on his wife with a suspected Chinese spy.
The move has, perhaps surprisingly, led many traders and other online observers to examine the rich history of big tech CEOs being unfaithful to their spouses and the long-term stock market performance of the companies following such scandals.
Advertisement
How major big tech stocks reacted to Nvidia-like scandals
Such examination, at face value, shows a phenomenon of firms seeing their shares ‘pump in the wake of their leadership’s troubled personal life becoming public knowledge.
A tech-focused investor and prominent X user, Gurgavin, highlighted three such high-profile cases. Alphabet’s (NASDAQ: GOOGL) stock rose about 1,200% since 2013 – the year it became known that co-founder Sergey Brin was having an affair with an employee.
Similarly, Amazon (NASDAQ: AMZN) stock rallied roughly 210% since Jeff Bezos was caught cheating on his wife in 2019. Finally, Microsoft (NASDAQ: MSFT) rose by some 115% since Bill Gates’ affair came to light in 2021.
Still, these cases are, arguably, completely irrelevant for the world of business, other than, perhaps, as a tool in gauging the moral fiber of some of the wealthiest and most powerful individuals on the planet.
The case of Nvidia CEO Jensen Huang, on the other hand, could be entirely different than those of some of his billionaire peers and might, if anything, lead to NVDA stock suffering the opposite fate of GOOGL, AMZN, or MSFT shares.
Why the Nvidia honeytrap scandal could be different
Crucially, the head of the world’s largest semiconductor company is alleged to have cheated on his wife with an operative of Chinese intelligence.
Advertisement
Given the overall importance of Nvidia’s systems and hardware, Huang’s close relationship with President Donald Trump’s Administration, and alleged sanctions evasion, the blue-chip chipmaker could soon face close scrutiny and severe penalties.
While China’s foreign ministry declared the spying allegations baseless, the semiconductor giant has been maintaining a somewhat suspicious attitude toward the East Asian country.
For example, while Nvidia CEO Jensen Huang previously claimed his firm’s market share in the People’s Republic fell to essentially nothing, the company has been receiving clearance to sell its products in a way that could lead them to landing with blacklisted companies.
Furthermore, short sellers like Culper Research have been claiming that the blue-chip chipmaker ‘has a significant China problem’ and that ‘over 20% of Nvidia’s FY 2026 compute revenues remained driven by China via illegal GPU diversion and Southeast Asian intermediaries’.
Under the circumstances and with the U.S.’s policy toward the People’s Republic and stance that advanced semiconductors are critical for national security, Jensen Huang’s company could end up facing steep losses in the coming years even if only parts of the allegations are confirmed.
Featured image via Shutterstock
