Nvidia’s ‘honeytrap’ scandal could deal a blow to a potential tech rally when the US market opens later, after a bruising sell-off last week.
Susannah Streeter, chief investment strategist at the broker Wealth Club, says that while Huang’s reputation may have taken a hit, it would be hard to replace him as boss of one of the most valuable companies in the US.
Just when some calm looked set to be restored to markets, the Jensen Huang spy bombshell has hit, threatening to charge the tech sector with fresh volatility…
Right now the furore does not look as though it’ll pull him from his throne, given how intertwined Nvidia’s valuation is with his superstar tech status and his position as the architect of its dominance in the semiconductor market.
That expectation may reassure investors, that while headline dominating, the affair won’t be a big bump in the road for the company.
For now, the repercussions across the wider chip industry look relatively limited although the scandal could disrupt the tech rebound. Nvidia’s Asian suppliers have gained back ground following last week’s brutal sell-off, with Taiwan’s TSMC climbing around 4.7% and South Korea’s SK Hynix and Samsung also making progress. These are important relationships given that TSMC manufactures Nvidia’s advanced AI processors, while SK Hynix supplies the high-bandwidth memory essential to powering them. Samsung is also fighting to secure a bigger slice of that lucrative memory market.
Chris Beauchamp, chief market analyst at the broker IG, takes a more cautious view, warning that the news could deal a blow to the tech rally.
This market finds itself having to cope with some mad things. Tariffs, Iran and now Huang’s relationship with a suspected spy. This will be one for the history books if the market continues to selloff on such news.
…Given the size of the company and its importance to so much of the AI and tech boom this news is going to be of importance to more than just the company and US national security.”