Morningstar Says Nvidia Revenue May Hold up Despite Investigation That Could Lead to Jensen Huang's Exit

Morningstar says Nvidia's revenue may hold up even if CEO Jensen Huang leaves the company, as its board investigates reports that he was targeted by a foreign intelligence operation.

In a 10 November assessment, the investment firm maintained its $310 (approximately £234) fair value estimate and four-star rating for Nvidia.

Analyst Brian Colello said demand for AI computing power remained greater than available supply, making the investigation unlikely to affect revenue in the near or medium term. However, Huang's departure could disrupt AI dealmaking and financing and invite greater regulation and political backlash around artificial intelligence.

Nvidia's board announced on 8 November that a committee of independent directors, assisted by outside counsel, would investigate reports that Huang had been the target of a foreign intelligence effort.

The Financial Times and The New York Times reported that US authorities believed Alice Huang, a Chinese businesswoman who controls the Singapore-based cloud computing company Megaspeed International, had been recruited by China's Ministry of State Security. Reuters said it could not independently verify the allegation.

Nvidia Board Says No Evidence of Security Breach

Huang told Nvidia employees he had been unfaithful to his wife and apologised, but did not identify the woman or publicly confirm she was the person named in the intelligence reports.

Morningstar interpreted his statement as confirming the reports' accuracy, but that remains the analyst's assessment, not independent confirmation.

Nvidia's board said it had no reason to believe national security or company secrets had been compromised. It expressed confidence in Huang and said he supported the review and would cooperate. China's Foreign Ministry rejected the espionage allegations as groundless.

Morningstar also highlighted Nvidia's 5 November statement describing Huang's interactions with Megaspeed as 'normal and not unusual'.

Colello questioned whether the spokesperson had relied on inaccurate information from Huang. The firm added investigations and espionage to the risks behind its 'Very High' uncertainty rating, while leaving its Wide Economic Moat and Exemplary Capital Allocation ratings unchanged.

Huang's Stake May Help Him Stay

Morningstar noted that Huang owns about 3.6 per cent of Nvidia and is the only chief executive the company has had. However, he has no supervoting shares, which can give founders greater voting control than their economic ownership would otherwise provide.

Yale professor Jeffrey Sonnenfeld estimated Huang had a '50-50 chance' of remaining chief executive, arguing that board trust and disclosure could matter more than the affair.

Former Securities and Exchange Commission chair Gary Gensler said the central investor question was whether material information had been withheld or shareholders misled.

Lawsuit and China Policy Add Pressure

An Nvidia shareholder filed a proposed class-action lawsuit against the company and Huang on 9 November, alleging investors were misled about the relationship and associated risks. The Associated Press reported the filing on 10 November. The allegations remain unproven.

The controversy also comes as US lawmakers push for tighter restrictions on exports of advanced chips to China. Measures including the AI Overwatch Act and Chip Security Act are being considered for inclusion in the fiscal 2027 defence authorisation bill, potentially increasing regulatory pressure on Nvidia's international business.

Nvidia shares fell 4.3 per cent on 9 November, wiping approximately $190bn (approximately £143bn) off its market value, while AMD and Broadcom rose.

Morningstar's assessment is that demand for AI infrastructure could keep revenue resilient even if Huang's leadership position changes. Whether the board's findings and regulatory fallout alter that outlook remains unresolved.