Nvidia Probe Weighs on Tech Stocks Clawing Back Losses

Quick Answer: Tech firms clawed back part of last week’s losses on Nov 9, fuelled by AI regulation worries, but Nvidia faced a board probe into Nvidia boss Jensen Huang over claims of an affair with a Chinese spy. Democrats swept both chambers of Congress, raising speculation of curbs on tech infrastructure projects that could put thousands of jobs at risk. For shareholders, the key number is the hundreds of billions of dollars pumped into the AI sector, and traders are still waiting to see when it turns into profit.

Why Did Nvidia Tech Stocks Claw Back Losses on Nov 9?

Nvidia tech stocks trading screen and chip market rebound — Tech stocks partly recovered on Nov 9 after AI regulation sell-offs.

Tech firms partially recovered on Nov 9 from losses fuelled by AI regulation worries. Gains were tempered by news of a probe into Nvidia’s boss.

Wall Street enjoyed a little stability at the end of last week, after a lashing on Thursday. Asia, which had suffered a hammering on Friday, largely followed suit to start this week.

What Is Behind the Nvidia Probe into Jensen Huang?

Nvidia’s board launched an investigation into whether Huang was targeted in a foreign espionage plot, after he admitted he was unfaithful to his wife. The New York Times reported last month that US intelligence officials concluded a Chinese executive linked to Singapore-based Megaspeed had been funnelling information to Beijing.

The executive, Alice Huang (also known as Huang Le), is not related to Jensen Huang, the Times noted. She developed a close relationship with the Nvidia boss, according to the report.

Nvidia is a global leader in chips used to train and run AI models. It became the first company to reach a US$5 trillion market capitalisation last year.

Dan Ives, technology analyst at investment bank Yorkville Ives, said the crisis will at the very least spark multiple congressional inquiries. He added it will “create an overhang on the stock for a myriad of reasons.”

How Did Asian Tech Markets Split on Nov 9?

Japan’s Nikkei 225 rose more than 2%, led by Tokyo Electron, Advantest and Sony.
Taipei jumped more than 4% after the Taiwanese government pledged market support, including curbs on short selling.
Taiwan backed a US$15.2 billion (RM13.6 billion) stock stabilisation fund.
Seoul gave up an early rally to end lower, with SK hynix and Samsung giving up most of their gains.

Hong Kong, Shanghai, Bangkok and Jakarta also posted gains.

Will the US Midterms Slow Data Centre Spending for Tech Firms?

Democrats swept both chambers of Congress, a rebuke to Donald Trump and the Republican Party. Voters were angry at the president’s Iran war and tariffs, which have sent prices soaring, as well as the data centre buildout.

Speculation now centres on the new Congress winding in tech firms’ construction drive, which could put thousands of jobs at risk. Traders remain nervous about when the sector’s spending will produce profit.

Sally Auld at National Australia Bank said fears around AI regulation, capital expenditure and free cash flow have driven risk reduction. “Nonetheless, the valuation of many tech stocks now looks less expensive.”

Which Tech Stocks Are Worth Monitoring Next?

The source article does not name a Bursa Malaysia-listed company, so no local stock is assessed here. Investors may want to watch whether Tokyo Electron, Advantest and Sony hold their gains in Tokyo.

Investors may also watch whether Samsung and SK hynix recover their Seoul losses. This week, US inflation data is due. Markets are pricing an 80 per cent chance of a Federal Reserve rate hike in December, after October’s job creation far exceeded expectations. Oil prices extended losses on hopes for an end to the Iran war.

Key Takeaways

Tech firms partly recovered on Nov 9 from AI regulation losses, but Nvidia faced a board probe involving Jensen Huang.
Democrats’ control of Congress raises the risk of curbs on tech data centre construction, which could put thousands of jobs at risk.
Taipei jumped more than 4%, backed by a US$15.2 billion (RM13.6 billion) stock stabilisation fund.
Seoul ended lower as SK hynix and Samsung gave up most of their gains.
The Fed’s December decision, with an 80 per cent hike chance priced in, is the next key test.

Disclaimer: This article is for general information only and is not investment advice. Do your own research before making any investment decision.

Frequently Asked Questions

Why did tech stocks recover on Nov 9?

Tech firms partially recovered from losses fuelled by AI regulation worries. Gains were tempered by news of a probe into Nvidia boss Jensen Huang.

Is Nvidia under investigation over Jensen Huang?

Nvidia’s board launched an investigation into whether Huang was targeted in a foreign espionage plot. The probe followed his admission that he was unfaithful to his wife.

How much is Taiwan’s stock stabilisation fund in ringgit?

Taiwan’s US$15.2 billion stock stabilisation fund equals RM13.6 billion. Taipei jumped more than 4% after the government pledged support for the market.

Will the US midterms affect AI stocks?

Democrats swept both chambers of Congress, raising speculation of curbs on tech data centre construction. Analysts warn this could put thousands of jobs at risk.

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