Back to the Blog

· 8 min read · Updated

Markets

Nvidia Is in a Bear Market After the Jensen Huang Story: Why I Bought More

Down about 29% from its high on a headline, with revenue up 106% and guidance unchanged.

The short answer

Nvidia closed at $168.89 on November 10, 2026, about 29.4% below its record close of $239.24 on October 6, after two days of selling tied to reports about CEO Jensen Huang's relationship with a woman that intelligence agencies reportedly suspect of working for China. The board has opened an independent investigation; the claim that the relationship helped facilitate $7.5 billion of chip shipments is unconfirmed.

Nvidia's latest reported quarter showed revenue of $96.2 billion (up 106%) and a 75.0% gross margin, and its guidance assumes no Data Center compute revenue from China. The author, who owns Nvidia and added to the position, argues in opinion, not advice, that the drop prices a headline more than a business change, and lists what could prove that wrong.

Hey everyone,

Nvidia is having its worst stretch in months, and not because of anything in its financial statements. Over two trading days, November 9 and 10, the stock fell roughly 4.3% and then roughly 5.5% after reports tied CEO Jensen Huang to a woman that intelligence agencies reportedly suspect of working for China. Below is what is actually known, what is only alleged, what the business looks like underneath, and why I personally bought more. A disclosure up front: I own Nvidia, and I added to my position this week. That is my opinion and my money, not a recommendation for yours.

What happened to Nvidia's stock this week?

Nov. 10 close

$168.89

Record close (Oct. 6)

$239.24

Drop from record

-29.4%

Mon. / Tue. move

-4.3% / -5.5%

CNBC and NBC News report that Nvidia fell about 4.3% on Monday, November 9, after news that its board opened an independent investigation, then fell again on Tuesday, November 10, to its lowest close since late March. Tuesday's close of $168.89 is, by my math, 29.4% below the record close of $239.24 on October 6. That is the standard definition of a bear market (a fall of 20% or more from a peak), and it is a larger drop than the "nearly 20%" figure that has been circulating, which is about the two-day damage rather than the drawdown from the high. Some outlets cite slightly different figures (a 5.47% versus 5.53% Tuesday decline, or "about 6%" intraday). Those are rounding and intraday differences.

Not all of that fall is the Huang story. Nvidia was already off its highs after the October 30 sell-off in AI-linked stocks and the November 5 post-election AI crash (covered in our earlier posts), when worries about AI spending and a possible December rate hike hit the whole sector, and a hot inflation report on November 10 added to the pressure. The Huang news landed on a stock that was already weak.

What do we actually know about the Jensen Huang story?

I am going to be careful here, because this is about a real person and the story is moving. The reporting from CNBC, NBC News, and Yahoo Finance separates into three tiers.

  • Reported as confirmed: Nvidia's board has opened an independent investigation. Huang is reported to have acknowledged an extramarital relationship with a technology executive at a company that is an Nvidia customer. Nvidia has said Huang is committed to continuing to lead the company without interruption. A shareholder class-action lawsuit has been filed against Nvidia and Huang in federal court in San Jose, California.
  • Reported, but attributed to unnamed sources or officials: that intelligence agencies suspect the woman of being a Chinese intelligence asset, and that Huang was the target of a "foreign intelligence effort." President Trump said the FBI is looking into the matter while expressing support for Huang. House Democratic Leader Hakeem Jeffries said Congress needs answers.
  • Alleged, and not confirmed: The Information reported, citing two people who know the woman plus corporate records, that the relationship could have helped facilitate the shipment of at least $7.5 billion of Nvidia chips through Chinese companies. I have not seen this independently confirmed, and nothing I found shows that Nvidia or Huang did anything illegal. An investigation is not a finding.

I am not naming the woman because she has not been charged with anything and the espionage claim rests on anonymous sourcing. If you read one thing on this, read the CNBC and NBC pieces in the sources below, not social media summaries.

Has anything changed about Nvidia's business?

This is the heart of my argument. The fall in the stock is real. The change in the business, so far, is not visible in the numbers. Here is what Nvidia reported in its most recent quarter, the second quarter of fiscal 2027 (ended July 26, 2026), in its press release filed with the SEC on August 26:

Revenue

$96.2B

Growth vs. year ago

+106%

Data Center revenue

$89.0B

Gross margin

75.0%

Operating income was $63.7 billion (up 124%), GAAP net income was $59.7 billion, and the company returned about $26 billion to shareholders in the quarter, with roughly $99 billion left on its buyback authorization. For the current quarter, Nvidia guided to revenue of $108 billion, plus or minus 2%, and, importantly for this story, said it is "not assuming any Data Center compute revenue from China in its outlook." That matters: the headline risk about chips flowing to China is not something the company's forecast depends on. If China is a source of upside, it is not in the numbers.

Valuation, using my own rough math: non-GAAP earnings per share were $2.22 last quarter. Annualized, that is $8.88, which puts the stock at about 19 times that run-rate figure at Tuesday's close. That is a simple extrapolation, not a forecast, and growth can slow. But it is not the multiple of a stock priced for perfection,.

"AI has reached its inflection point... demand is accelerating."

Jensen Huang, in Nvidia's Q2 fiscal 2027 earnings release, August 26, 2026

Of course, a CEO says that in a press release. The reason I take it seriously is that it is backed by reported results. The thing I would watch closely is whether that demand holds, which I cover in the risk section below.

Why do I think this could be a buying opportunity?

My reasoning is simple, and it is a bet, not a certainty. Stock prices reflect expectations about future earnings. When the price falls about 29% and, over the same days, the earnings outlook has not been cut, then either the market knows something that is not yet visible, or it is pricing in a risk that is more about headlines than cash flows. Here is how I think about the two possibilities:

  1. The person risk. Huang is a founder who has run Nvidia since 1993. There is real key-person risk, and I take it seriously. But Nvidia's competitive position rests on a platform, with software, networking, and an annual chip cadence, that is carried out by tens of thousands of employees. The board investigation, if it finds something serious, could change who leads the company. It would not, by itself, make GPUs less in demand.
  2. The China risk. The allegation is about possible diversion of chips to China. The practical risk is tighter export enforcement and political scrutiny. Nvidia's guidance already assumes zero Data Center compute revenue from China, so the downside to guidance from a crackdown looks limited to me. The risk is more about fines, investigations, and the political climate than about lost sales that are in the forecast.

History offers loose context, not a guarantee. Nvidia has had drawdowns of more than 20% several times in its run, including in 2022 and in 2025. Past drawdowns do not predict a recovery. I mention them only because a 29% fall is not unprecedented for this stock. I may be wrong, and I could lose money on this purchase.

What could prove me wrong?

Anyone who writes "I bought more" should be forced to say what would change their mind. Here is my list:

  • The investigation finds wrongdoing. If the board or regulators find that chips were knowingly diverted, or that Huang compromised the company, the damage could include fines, license restrictions, and a leadership change. That would be a different company risk than the one I am assuming.
  • The class action and political pressure escalate. Congress and the FBI are mentioned in reporting. Heavy political scrutiny could lead to stricter export rules or limits on sales to other regions, not just China.
  • AI spending slows. This is the bigger risk to me. Nvidia's results depend on its customers continuing to spend. On October 30, Alphabet, Amazon, and Intel earnings raised questions about the cost of the AI buildout, and new reporting shows many AI customers are funding it with debt (see my companion post on CoreWeave). If customers cut spending, Nvidia's guidance would be next.
  • The multiple keeps compressing. Even with unchanged earnings, a stock can keep falling if investors decide AI-linked companies deserve a lower multiple. Rate hikes make that worse.
  • The news gets worse before it gets better. Stories like this often have a second and third chapter. Buying after a 29% fall does not mean the low is in. I am not trying to pick the bottom, which is why I added to a position instead of going all in.

What should a long-term investor do with a story like this?

I am not telling you to buy Nvidia. I am telling you how I think about a drop that is driven by a news event. First, separate what is confirmed from what is alleged. Second, check whether the business numbers or guidance actually changed. Third, size the position so that being wrong does not hurt you, because with a headline-driven fall you cannot know the final chapter. Fourth, decide in advance what would make you sell, so that you are not making the decision in a panic.

If you already own Nvidia through an index fund (it is one of the largest holdings in most U.S. stock funds), you are exposed whether or not you buy more. That is worth knowing before you add.

Key takeaways

  • The stock is about 29% below its record close, a bear market, after two days of heavy selling tied to a news story about its CEO.
  • The allegations are reported, not proven. The board investigation is real. The $7.5 billion shipment claim and the espionage link rest on anonymous sourcing and are unconfirmed.
  • Nothing in the latest reported numbers has changed: $96.2 billion of revenue, up 106%, a 75% gross margin, and guidance that assumes no China data center revenue.
  • My view, which is only opinion: the sell-off prices a headline more than a business problem, so I bought more. The main thing that could prove me wrong is AI spending slowing, not the Huang story itself.

More soon,
Learn to Love Money

Frequently asked questions

Is Nvidia in a bear market?

Yes by the usual definition. Nvidia closed at $168.89 on November 10, 2026, about 29.4% below its record close of $239.24 on October 6, a fall of more than 20% from a peak.

What is confirmed about the Jensen Huang story?

News outlets report that Nvidia's board opened an independent investigation, that Huang acknowledged an extramarital relationship with an executive at an Nvidia customer, and that a shareholder class action was filed. Reports that intelligence agencies suspect the woman of being a Chinese asset rely on anonymous sources, and the claim about $7.5 billion of chip shipments, from The Information, is unconfirmed.

Did anything change in Nvidia's business?

Not in the latest reported numbers. In the quarter ended July 26, 2026, revenue was $96.2 billion, up 106%, Data Center revenue was $89.0 billion, and the outlook for next quarter was $108 billion, plus or minus 2%, with no Data Center compute revenue from China assumed.

Why does the author think this could be a buying opportunity?

It is an opinion, not advice: the drop reflects a news event while reported results and guidance have not changed, and guidance already excludes China. The author discloses owning Nvidia and adding to the position.

What could prove that view wrong?

A board or regulatory finding of wrongdoing, tighter export rules or political action, a slowdown in customer AI spending, continued multiple compression, or further negative news.

NOT FINANCIAL ADVICE. This post reports news and shares the author's personal opinion and position for education and discussion. It is not a recommendation to buy, sell, or hold any security and ignores your circumstances. The author owns Nvidia shares and added to the position. Allegations described here are reported by news outlets, have not been proven, and may change as investigations proceed. Stocks can fall further.

Sources