On Monday the stock market went one way and its biggest company went the other.
Wall Street bought chipmakers, AI hardware and Big Tech. It sold Nvidia Corp. (NVDA).
Shares of the AI chip leader fell as much as about 7% early in the session and were down 3.9% at $179.41 by midmorning.
Meanwhile, the SPDR S&P 500 ETF Trust (SPY) rose 1.9% and the Invesco S&P 500 Equal Weight ETF (RSP) added 1.6%.
The selloff has nothing to do with chips or demand. It comes from the corner office.
Over the weekend, CEO Jensen Huang admitted to an extramarital affair in an email to employees and apologized to his family, staff, board, partners and shareholders.
The woman has reportedly been identified as Alice Huang, a former executive at Singapore-based Nvidia customer Megaspeed, whom U.S. intelligence officials reportedly suspect of passing information to Beijing. She is not related to the Nvidia CEO.
On Sunday, Nvidia's board opened an independent investigation led by a committee of independent directors with outside legal counsel.
The board said it has "no reason to believe that either national security or NVIDIA secrets were compromised." It also expressed confidence in Huang, who has agreed to cooperate fully.
China's Foreign Ministry rejected the espionage allegations on Monday as unsubstantiated.
Nvidia Stock Has Broken Away From the Chip Trade
The split is clearest inside the semiconductor sector.
Advanced Micro Devices Inc. (AMD) rose 9.6% and Broadcom Inc. (AVGO) gained 7.9%. Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) added 4.4%, and Marvell Technology Inc. (MRVL) climbed 9.2%.
Even the VanEck Semiconductor ETF (SMH) rose 3.9%, though Nvidia is its largest holding.
That combination is rare. Since SMH relaunched in late 2011, Nvidia has closed down 5% or more on a day the ETF closed higher only twice: May 8, 2015 and Aug. 11, 2017.
Back then Nvidia carried little weight in the fund. Today it is the fund's anchor, and the rest of the sector is still rising around it.
The gap with the broader market is also unusually wide. Nvidia is trailing SPY by about 6 percentage points, which would be its widest closing gap since March 2025. On Jan. 27, 2025, China's DeepSeek model knocked 17% off the stock, leaving it nearly 16 points behind SPY.
The RSI Hasn't Been This Low Since 2019
At Monday's open, Nvidia's 14-day relative strength index dropped to 24.9. Readings below 30 are considered oversold. By midmorning, with the stock off its lows, the RSI was about 27.
Except for last Thursday's 25.4, the stock hasn't been this oversold since late May and early June 2019, when the RSI bottomed at 18.8 on June 3.
That episode also had a China angle. In May 2019, Washington raised tariffs on $200 billion of Chinese goods and put Huawei on the Entity List, and chip stocks fell across the board.
This time Nvidia is falling on its own.
The stock is down about 17% from its Oct. 28 close of $215.38. It is 25% below its record close of $239.24 on Oct. 6, about 4% lower for the year and near its lowest close since early April.
Wall Street Has Not Walked Away
Some on Wall Street are standing by the stock. RBC Capital Markets kept its Outperform rating and $330 price target on Monday, which implies more than 80% upside from current levels.
Others are more cautious about calling a bottom across AI-related names.
"There's a danger that it may be a little bit premature to load up and 'buy the dip,'" Trade Nation senior market analyst David Morrison said in an emailed note Monday.
For now the market has split the AI trade from the company that led it. Investors are keeping the chips. They are pricing in a risk around the CEO.
The board's findings will decide whether that gap closes or turns into a longer discount on Nvidia's leadership.
