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Nvidia shares extended their sharp decline in premarket trading as investors reacted to a report on Jensen Huang’s alleged infidelity and the launch of a new internal investigation. NVDA fell to a low of $175.87, its weakest level since April 7 and 27% below its high for the year. Jim Cramer, however, urges investors to look past the noise and buy the dip.
Nvidia Stock is Falling After Jensen Huang Admitted Potential Chinese Spying
NVDA stock continued its strong downward trend, reaching its lowest level since April after Huang sent a letter to his employees. In it, he confirmed that he was in a relationship with a Chinese woman, who US intelligence services believe is a spy.
Nvidia’s board has announced an investigation to the matter, while officials in Washington have called for meetings, and potential hearings.
Therefore, the stock is falling as investors assess the impact of the situation. However, in most cases, such big moves after a major event tend to be short-lived. Indeed, Jim Cramer, the popular analyst, wrote that he would buy more Nvidia shares after that drop.
He argued that Nvidia still offers the most cutting-edge technology and that this advantage is not going away. He also noted that demand for its GPUs has kept rising this year, and he dismissed the ongoing panic after the Democrats’ election win as noise.
Nvidia Expected to Publish Strong Earnings
These developments are coming as investors wait for the company’s earnings report, which will show whether demand is rising.
Data compiled by Yahoo Finance shows that analysts expect that the company’s revenue growth to be supercharged last quarter. In this, the average estimate is that its revenue jumped by 91% in the third quarter to $108 billion. Nvidia tends to d
Key insights
o better than estimates, meaning that its third-quarter revenue will be over $110 billion.
Recent earnings by technology companies have sent signals about what to expect. AMD, a top competitor, published strong earnings, with its data center business gaining momentum.
Nvidia’s top clients like Microsoft, Google, and Amazon also released strong numbers and maintained their capital expenditure plans.
These results come at a time when the company’s valuation has slumped, with the forward price-to-earnings ratio being 20. The cheap valuation explains why the company decided to start a $150 billion share repurchase program.
Still, Nvidia faces some potential risks ahead. The most notable one is the ongoing data center delays and the potential moratoriums after Democrats won the midterm elections. It also faces a risk in the fair value of its investments since many companies it has invested in have tumbled.
For example, Intel has slumped by 60% from its peak this year. CoreWeave, Nebius, IREN, and Marvell Technology have all slumped by double digits from their all-time highs. Other companies it has invested in, including Lumentum and Intel have all plunged.
Nvidia Stock Price Technical Analysis
On the charts, Nvidia shares have been in a strong bearish breakout in the past 30 days. It has dropped below the 38.2% Fibonacci Retracement level. This retracement is drawn by connecting the lowest level in 2025 and the all-time high.
The stock has also moved to the lower side of the Bollinger Bands. It has also slumped below the 50-day Exponential Moving Average (EMA).
Therefore, there is a likelihood that the stock will remain under pressure in the near term. However, it is also possible that it will bounce back, possibly to the key resistance level on $200.
This article provides market information, not financial advice. Stock prices can fluctuate sharply, and price forecasts do not guarantee returns. Readers should consult a qualified financial professional before making investment decisions.
