WHAT ARE INVESTORS WORRIED ABOUT?
The controversy has raised questions about national security, corporate governance, regulatory scrutiny and possible consequences for Nvidia’s business.
The New York Times reported last month that Alice Huang, the woman linked to Nvidia’s CEO, was a Chinese intelligence asset who passed information to Beijing and helped the Chinese government evade US chip export curbs.
China has rejected the allegations as “groundless speculation”, while Nvidia’s board has said it has no reason to believe company secrets or US national security were compromised.
Wong said investors were likely concerned that the controversy could lead to closer scrutiny of Nvidia’s technology transfers, compliance with US export controls and customer relationships in China and Southeast Asia.
Such scrutiny could weigh on Nvidia’s revenue prospects in the region, he said.
“From an equity valuation perspective, the greater concern is that the investigation could create a prolonged governance discount, especially if it introduces uncertainty over leadership continuity, US export approvals or regulatory compliance,” Wong told CNA.
A governance discount means investors may be willing to pay less for a company’s shares because they perceive additional risks, even if its earnings outlook has not materially changed.
The allegations have also attracted attention from US lawmakers, who have questioned whether sensitive American technology or information could have been exposed.
Top Republican lawmakers in the US House of Representatives said in a letter on Nov 4 that the issue raises “significant national security concerns regarding (China’s) access to sensitive US technology and information”.
Technology analyst Dan Ives of Yorkville Ives told AFP the controversy could trigger congressional inquiries and continue weighing on Nvidia’s shares.
“The key questions are whether he was aware of any espionage activities and whether any confidential or strategically sensitive information was compromised,” George Chen, a partner at Washington-based consultancy The Asia Group, told AP.
“Those questions require evidence rather than speculation,” he said.
US President Donald Trump said on Monday that Huang had told him he was unaware of the woman’s alleged intelligence ties, adding that he believed the Nvidia CEO.
Nvidia and Huang also face a shareholder lawsuit alleging they failed to disclose material information about Huang’s relationship with Alice Huang.
The controversy also has a Singapore connection. Alice Huang had reportedly been a top executive at Singapore-based Megaspeed International, which has faced US scrutiny over suspicions that it helped Beijing gain access to Nvidia’s advanced AI chips whose export to China is restricted.
WILL NVIDIA’S BUSINESS BE AFFECTED?
Despite the uncertainty, Chong remains confident in Nvidia’s underlying business.
“We are still confident on NVIDIA’s fundamentals at this stage,” he said, pointing to expectations of higher spending on semiconductor chips by major technology companies in 2027.
Nvidia’s next-generation Vera Rubin graphics processing units (GPUs) are expected to support growth into 2027, while its Feynman chips are scheduled for launch in 2028, he added.
Chong said Nvidia’s long-term value was underpinned by its CUDA software ecosystem, which developers have used for nearly two decades to build and run AI applications.
“Enterprises and hyperscalers remain locked into NVIDIA hardware out of technical necessity,” he said.
