Jensen Huang Might Be the Biggest Wild Card for Nvidia Stock. Here's What to Watch During Earnings on Nov. 17
Nvidia's business is still booming, but the investigation tied to its CEO adds a risk that no one can yet price in. Here are the four things to watch next week.
Investors in Nvidia (NVDA) have faced challenges recently, culminating in CEO Jensen Huang admitting to infidelity and the board launching an investigation into whether foreign intelligence targeted him. While the board reported no evidence of national security compromise or Nvidia secrets being breached, investor concerns persist. The stock dipped around $176, a 5.5% decline on the day and 23% below its Oct. 9 close of $229.28. However, Nvidia's history and financial performance suggest resilience.
Nvidia was co-founded by Huang in 1993, and he has led the company ever since. Its earnings report on Nov. 17, therefore, carries significant weight. Despite the uncertainty surrounding Huang, Nvidia's financials remain impressive. In Q2 2025, revenue soared 106% year-over-year to $96.2 billion, with data centers accounting for $89.0 billion.
Net income reached $59.7 billion, a 126% increase from the same period a year earlier. Historically, Nvidia has earned $7.91 per diluted share, trading at about 22 times trailing earnings, a reasonable valuation for a company with double-digit sales growth.
The allegations against Huang and the investigation into potential misuse of Nvidia chips are not unrelated. Alice Huang, the CEO's ex-wife and a former Megaspeed executive, is implicated in a Commerce Department investigation for allegedly aiding Chinese entities in circumventing U.S. export controls. This ties the controversy to a major risk Nvidia has acknowledged: its chips potentially ending up in prohibited markets.
Despite this, Nvidia has been transparent about the risk, noting it could negatively impact the business, even if unsubstantiated.
Analysts anticipate earnings per share of $2.49, more than double the $1.24 reported a year ago. A beat on earnings could stabilize the stock's trajectory. The company's guidance for the current quarter will reveal whether demand from key customers remains strong. Given Nvidia's dependence on AI spending budgets from major tech firms, any signs of slowdown would be critical.
During earnings calls, Huang's presence and demeanor will be closely watched, along with comments on the investigation's status and any potential changes to his role. The upcoming Q3 10-Q filing, scheduled for Nov. 17, will offer further insights, particularly concerning new risks pertaining to Huang or the ongoing inquiry.
Nvidia's position as a leader in AI chips remains robust, and the stock is near the lower end of its 52-week range. However, the investigation introduces an unfathomable risk that remains undervalued by the market. For long-term investors, a gradual approach to Nvidia's stock seems prudent, alongside maintaining a balanced portfolio of tech stocks. Those seeking exposure to AI without relying on one CEO may consider a diversified basket of semiconductor stocks.
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