Schwab Network on $NVDA (Nov 10, 2026)
NVDA carries key-man risk if CEO Jensen Huang is replaced and regulatory risk from alleged willful sanctions evasion involving GPUs sent toward China; the investigation is expected to be very long. Shares have moved lower recently, though trading action gave some confidence the market could sustain a leadership shakeup given no clear successor; the street puts roughly a 15% chance on his removal.
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It's like a soap opera. I can tell you that, Diane. It's a lot happening every single moment here. We know that CEO Jensen Juan did uh admit to an affair with a potential Chinese spy and there now is a investigation not only by the Nvidia board but also the FBI is looking into this as well.
President Trump did bring that up yesterday during a press conference. The allegation is that Nvidia moved around 240,000 H100s, H200's as well as A100 GPUs into China or sent them over to Singapore in order for China to be able to utilize those.
That's the allegation that's being brought against this potential Chinese spy by the FBI here.
So, this is going to take a little bit of time. Obviously, we are seeing the shares moving a little bit lower here over the last couple of trading sessions. There's kind of two different type of risk that is out there right now.
It's keyman risk. Dan Ives already kind of highlighted that in a post this morning. Could we see moves to the downside even further if Jensen Wong were to be replaced as CEO?
And then you also have the regulatory or potential uh risk of violating sanctions if there was willfully or knowingly trying to evade sanctions in order to give China these this access.
Though I would expect that this is going to be a very long investigation. It seems like President Trump right now is on Jensen Wong's side. So, we'll see if that actually kind of plays into some of the politics.
And if not, I mean, some of that the trading action that we saw yesterday out of Nvidia going into some of these other names was actually a little bit gave you a little bit more confidence that the market maybe could be able to sustain itself if we do see a shakeup in leadership when it comes to Nvidia because unfortunately we don't have a clear successor uh to his role.
And that's one of the things that Dan IV said in his note uh as well. He says right now the street and investor chatter is assigning a roughly 15% chance he's removed as CEO with a high probability essentially the uh extrapolation from there that he would stay on as but obviously he has to clear a board investigation.
There's calls for him to come before Congress. FBI investigating. You got uh shareholders angry as well. He's still acting as the CEO though, so they have not actually kind of stopped his position and halted his day-to-day activities because of the investigation.
I think that also does kind of signal something as well. Just to kind of throw that out there, the board could have went a completely different route and and basically suspended him in his role until the investigation was done.
That's usually what we do see in events like this. That's just not the case this time around.
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