AMERICA - Shares of US chipmaker Nvidia fell for a second consecutive trading session on Tuesday, losing 4% to trade at $171.55 as the company faced a shareholder lawsuit and an independent investigation involving Chief Executive Officer Jensen Huang.
The stock fell $7.12 from Monday's closing price of $178.67, after losing 4.27% in the previous session. The two-day decline brought Nvidia's share price down nearly 7.9% since Friday's close.
Shareholder Lawsuit
A proposed class-action lawsuit filed Monday in a US federal court in California accuses Nvidia and Huang of withholding information from investors about his alleged relationship with a former executive at Singapore-based Megaspeed International.
The complaint, filed by shareholder Mark Kistenmacher through The Rosen Law Firm, claims that Nvidia gave investors an incomplete picture of its business dealings with the company and its efforts to prevent the unauthorized transfer of its chips.
It challenges Nvidia's claim that an internal review found no evidence that chips were diverted to unauthorized recipients, as well as Huang's description of the company's dealings with Megaspeed as normal.
According to the lawsuit, Nvidia failed to disclose Huang's alleged personal relationship with Alice Huang, a former Megaspeed executive suspected of gathering intelligence for China.
The plaintiff argues that this information could have affected investors' assessment of Nvidia's business risks, potentially damaging its reputation and future prospects. The lawsuit claims that withholding the information artificially inflated the company's share price and seeks unspecified financial compensation.
The case covers investors who purchased Nvidia shares or other securities between Oct. 9, 2025, and Nov. 8, 2026, and alleges violations of US securities laws.
Independent Investigation
The lawsuit follows Nvidia's announcement Sunday that its independent board members would investigate reports that Huang had been targeted by a foreign intelligence effort.
The investigation will be conducted with the help of outside legal advisers.
Nvidia's board said it had no reason to believe that the reported activity had compromised national security or exposed the company's confidential information. However, it said it would examine all available information.
The company added that Huang supports the investigation and will cooperate, while expressing confidence in his leadership and management team.
