Key takeaways
- Nvidia shares tumble despite broader AI stock recovery
- Amazon gains 5.5% as Microsoft and Alphabet advance
- Jensen Huang investigation adds uncertainty before Nvidia earnings
Nvidia shares plunged more than 6% during Monday morning trading as Amazon, Microsoft and Alphabet rallied, exposing a sharp divide among artificial intelligence stocks following last week's technology market selloff.
At approximately 10:07 a.m. Eastern Time on November 9, Nvidia traded near $174.74, down 6.38%. Amazon jumped 5.5%, Alphabet gained 3.46%, and Microsoft advanced 2.6%, while the broader Nasdaq recovered from its recent correction.
Nvidia subsequently recovered part of its losses, narrowing its decline to approximately 3.8% shortly before 11 a.m. The divergence follows an official board statement confirming an independent investigation involving CEO Jensen Huang.
Nvidia Stock Plunges as Jensen Huang Investigation Raises Questions
Nvidia shares fell to an intraday low near $170.24, approximately 8.8% below Friday's $186.64 closing price, before recovering some ground.
The decline followed the company's November 8 announcement that its board would investigate reports that Huang had been targeted by a foreign intelligence effort.
Independent directors, supported by outside legal counsel, will oversee the review.
However, Nvidia emphasized that it currently has no reason to believe either company secrets or US national security were compromised. The board also expressed confidence in Huang's leadership.
The investigation adds company-specific uncertainty following Nvidia's recent stock selloff, which saw shares plunge 9.26% on November 5.
Amazon, Microsoft and Alphabet Lead AI Stock Recovery
The broader technology sector recovered as investors returned to companies that had suffered significant losses during last week's market correction.
Amazon gained approximately 5.5%, while Microsoft and Alphabet advanced 2.6% and 3.46%, respectively.
The rebound also extended to semiconductor companies competing with Nvidia.
Broadcom climbed approximately 6.5%, while AMD and Marvell recorded strong gains, contrasting with Nvidia's weakness.
The Philadelphia Semiconductor Index advanced roughly 3.3% during early trading, suggesting that investors were not abandoning the entire AI industry.
The recovery follows a substantial valuation contraction across semiconductor stocks as investors reassessed the cost of expanding computing infrastructure.
Microsoft, Amazon and Alphabet remain exposed to substantial AI spending, but their cloud computing, advertising and enterprise software operations provide revenue streams beyond specialized chip sales.
Meanwhile, the Nasdaq correction has raised questions about whether technology valuations can recover without stronger earnings and improving financial conditions.
Nvidia Earnings and US Inflation Data Become Critical Tests
The divergence arrives ahead of several important events for technology investors.
Nvidia is scheduled to report earnings on November 17, when shareholders will assess demand for AI processors and the company's outlook for data center spending.
Before then, CoreWeave's November 10 earnings will offer another indication of financial conditions across the AI infrastructure market.
The company has faced rising credit-market pressure, making its financing costs and future spending particularly relevant.
Investors are also awaiting Tuesday's US Consumer Price Index report, which could influence expectations for Federal Reserve interest rates.
Higher inflation could weigh on technology valuations, while cooler data might support the broader stock market recovery.
