‘SOXL’ surges 20% as NVIDIA plunges 9% intraday... “Replacing Jensen Huang is the biggest uncertainty”

[Financial News]

NVIDIA shares plunged on the 9th (local time). A scandal over CEO Jensen Huang’s affair sent the stock sharply lower.
However, the semiconductor sector was strong, with the leveraged exchange-traded fund (ETF) Direxion Daily Semiconductor Bull 3X (SOXL), which tracks three times the daily share-price moves of 30 major semiconductor stocks, surging more than 20%.

NVIDIA shares fell as low as $170.24 intraday, down $16.40 (8.78%) from the previous close. As noon approached, they recouped some of their losses and were trading down in the low 6% range.
News of the affair between CEO Huang and Alice Huang, a Megaspeed executive whom U.S. intelligence officials consider a Chinese spy, is spreading rapidly.
NVIDIA said its board had launched an independent investigation into the CEO’s affair.
In a statement on the 8th, NVIDIA said Huang had “promised to actively support and cooperate with the investigation.”
According to CNBC, NVIDIA co-founder and CEO Jensen Huang admitted to the affair in an email to employees, saying he had “strayed” from his responsibilities to colleagues, the board, and partners and shareholders around the world. He added, “I was not faithful to my wife,” and, “My actions hurt my wife and children. There is no excuse for my actions. I deeply apologize.”
However, according to Reuters, China’s Ministry of Foreign Affairs dismissed the “so-called Chinese spy theory” as baseless rumors in a spokesperson’s statement on the 9th.

The launch of an investigation into Jensen Huang has raised questions about whether he can continue as CEO.
Technology analyst Dan Ives, a senior managing director at Yorkville Ives & Co., told CNBC that any discussion of replacing CEO Huang was “comedy.”
Ives noted that the affair and the related investigation were a “game changer” for NVIDIA and its CEO, but would not change the fact that NVIDIA is two to three years ahead of China in AI chips.
However, he said, “From an investor’s perspective, the concern surrounding the current situation is whether Jensen Huang will remain CEO. Wall Street thinks that is likely, but any outcome is possible depending on the results of the board’s investigation, and that is precisely what has created enormous uncertainty.”

NVIDIA plunged that day, but other semiconductor stocks were strong.
Micron surged 6.6%, Intel jumped 4.3%, and SK hynix’s American depositary receipts (ADRs) rose 5.3%. Sandisk and Western Digital soared 8.2% and 10%, respectively. The iShares Semiconductor ETF (SOXX) surged 7%, while the leveraged ETF SOXL soared 20.6%.
However, if Jensen Huang steps down as CEO, repercussions are expected for semiconductor stocks.
Panmure Liberum investment strategist Joachim Klement warned that the impact is currently limited to NVIDIA, but the situation could change if CEO Huang’s position comes under threat.
Klement said that if CEO Huang’s position were shaken, “NVIDIA could cut off support for other companies in Asia or the United States,” adding, “If that happens, the shock could spread to other semiconductor stocks as well.”

Despite concerns that he may have been recruited by a Chinese spy, U.S. President Donald Trump declared his support for Jensen Huang on the 8th.
Trump told reporters, “He’s an honorable friend,” adding, “There may be a reason for this. We need to hear him out.” He went on to praise Huang, saying, “He has done great things for our country.”
Sean Maguire, a partner at private-equity firm Sequoia, also came to Huang’s defense. On social media platform X, he called Jensen Huang “one of the greatest entrepreneurs of this era” and said, “You can’t fix things with two mistakes. Jensen is irreplaceable to U.S. AI leadership.” In other words, replacing Huang to make up for his mistake would be a second mistake and would only make the situation worse.
Elon Musk, CEO of SpaceX and Tesla, also shared Maguire’s tweet and said he agreed.
Meanwhile, NVIDIA will report its quarterly results after the market closes on the 17th.
[email protected] Song Kyung-jae Reporter