Nvidia's stock rebounded in premarket trading on Wednesday, rising 4.5% as of 5:00 a.m. ET, following a two-day decline amid growing scrutiny of CEO Jensen Huang's personal scandal. The company's shares had dropped 5.47% on Tuesday and 4.3% on Monday after details emerged about Huang's affair with an alleged Chinese spy.
In response to the controversy, Nvidia announced it had hired the law firm Wachtell, Lipton, Rosen & Katz to investigate potential risks to company secrets or national security. Huang returned to the office on Monday and continued working on Tuesday, maintaining a 'business as usual' approach ahead of the company's quarterly earnings report scheduled for November 17.
Investors are evaluating the potential impact of the scandal on Nvidia's business. Bank of America outlined three possible scenarios in a Tuesday note, ranging from contained impact with leadership continuity to escalated consequences requiring earnings reassessment. Analyst Vivek Arya noted that prolonged uncertainty could pressure valuation before earnings.