The Nvidia Special 🍿

The next AI IPO could be $2 trillion. Three public companies could offer exposure now, and one most investors haven't connected to the story. Get all three tickers free.

240,000 Nvidia chips. One alleged affair. Zero chill.

Welcome to the Nvidia Special.

The world's most important AI company is caught up in a story that sounds like a spy thriller. It has secret networks, export-restricted chips, the FBI and a CEO confession.

Grab a coffee. Here's everything that happened 👇

According to The Information, Jensen Huang's alleged affair helped move at least $7.5 billion of Nvidia chips into China.

That's more than $20 million a day, every day, for a full year.

The woman involved is Alice Huang (no relation), a Singapore-based data center executive suspected of spying for Beijing.

Here's how the network allegedly worked:

From brand-new company to Nvidia VIP in about four months.

Most of us can't get a dentist appointment that fast.

Then orders for Nvidia chips covered by US export restrictions started to stall.

According to the report, Alice Huang used her ties to Nvidia and its distributors to get supply anyway.

The result: about 240,000 H100, H200 and some A100 chips moved into China.

These are the chips Washington has spent years trying to keep out of China. That's roughly 650 a day for a year.

Then came the confession.

Huang, 63, told Nvidia employees he had been unfaithful to his wife. He gave no other details about the relationship.

Then the feds got involved.

President Trump said the FBI is probing the matter.

And on Tuesday, the New York Times reported Trump was told back in May, on his way to China, that Huang was likely romantically involved with the executive.

So Trump knew six months before the market did. Not the kind of insider info you can trade on.

Nvidia's board has now hired some very serious help.

The independent board members have hired Joon H. Kim, the former acting US Attorney for the Southern District of New York, along with his firm Wachtell, Lipton, Rosen & Katz.

Their job is to find out whether Huang was the target of a foreign intelligence effort.

The board released a statement on Sunday and has given no other details since.

When a board calls in a former top federal prosecutor, you know this is bigger than an HR complaint.

Somewhere, a Netflix producer is already taking notes. And there’s more…

Ready to transform artificial intelligence from a buzzword into your personal revenue generator

HubSpot’s groundbreaking guide "200+ AI-Powered Income Ideas" is your gateway to financial innovation in the digital age.

Inside you'll discover:

Download your guide today and unlock a future where artificial intelligence powers your success. Your next income stream is waiting.

Get Your Guide

The stock took the hit you'd expect.

Two analysts also trimmed their price targets ahead of earnings.

Citi cut its target to $285 from $315. It still rates the stock a Buy.

Analyst Atif Malik expects a "modest" earnings beat. Sales should be higher, but margins are being squeezed by rising HBM prices.

(HBM is the high-speed memory packed into AI chips. When memory costs rise, Nvidia's profit per chip shrinks.)

Citi also expects Nvidia to stick to its forecast of 70% revenue growth for fiscal 2028.

Malik's list of what investors want to hear about on the call:

The alleged spy scandal comes fourth, after the chip rollout schedule.

Analysts have a real gift for understatement.

Wells Fargo cut its target to $300 from $315. Also still a Buy.

Analyst Joe Quatrochi expects "solid upside" when Nvidia reports its fiscal Q3. More importantly, he thinks it could restore confidence that the AI spending boom has legs.

On the investigation, he called it an "overhang" but said he's comfortable with the risk-reward at current levels.

His reasoning is that 2028 earnings estimates look "durable", with little to no risk of demand falling apart right now.

In short; messy headlines, full order book.

Now for the people arguing this is a buying moment.

Mizuho's Jordan Klein says Nvidia is "silly cheap."

His evidence is that Nvidia's forward P/E has dropped below 10x.

In plain English, investors are paying less than $10 for every $1 of profit Nvidia is expected to earn next year.

Klein says multiples that low are usually reserved for companies in structural trouble or secular decline.

That's the kind of price tag you'd expect on a fax machine maker. Nvidia sells the shovels for the AI gold rush.

So how did it get this cheap?

The stock has been "derating" for a while. That means earnings have grown much faster than the share price.

It's now pricing in a lot of uncertainty, from post-election worries to questions about Huang's leadership.

And Klein doesn't play down that risk.

He called Huang "irreplaceable in the minds of investors" and a visionary for the entire AI industry.

Nvidia does have a deep bench of talent. But Klein says the biggest worry is the unknown timeline. Nobody knows how long this drags on.

Evercore's Julian Emanuel is even more bullish.

His firm recently put Nvidia on its list of AI stocks to buy for next year.

He says this dip could be "the opportunity of an absolute lifetime" if leadership remains sound.

That "if" is carrying more weight than a fully loaded server rack.

Emanuel also flagged a bigger shift:

Tech stocks are now trading cheaper than the S&P 500 for the first time in more than a decade.

Think about how strange that is. The sector the whole market has been chasing for years is now priced at a discount.

He also expects the AI boom to keep rolling even if the turbulence at Nvidia continues.

So what does all this mean for your money?

1. Key-person risk is now officially in the price.

Few trillion-dollar companies are as closely tied to one person as Nvidia is to Jensen Huang. Any news about his future will move the stock hard, in either direction.

2. The timeline is the real enemy.

Markets can price bad news. They struggle to price open questions. An FBI probe, a board investigation and a top law firm all run on their own schedules, not Wall Street's.

3. The China angle is a wildcard.

Export-restricted chips allegedly ended up in China through Nvidia's own partner network. How Washington responds is an open question, and one investors will be watching closely.

4. November 17 is the next big test.

Earnings will be the first hard data since the story broke. Analysts expect a beat. The bigger tells will be guidance, 2028 visibility, and whether management addresses the investigation head-on.

5. You probably own some of this drama already.

Nvidia is a major holding in tech ETFs like XLK, VGT and IYW, and in the S&P 500. If you hold an index fund, this story is in your portfolio whether you picked Nvidia or not.

6. Cheap can stay cheap.

A sub-10x multiple suggests a lot of bad news may already be baked in. But valuations can always fall further if the story gets worse. It's a two-way bet.

Nvidia built the engine for the AI boom. This week its CEO became the headline instead.

All eyes on the 17th. 🍿

Your business has years of emails, documents, CRM records and call logs. AI researchers need exactly that kind of real-world data, and Mode will pay for it.

You sell a de-identified copy. Your original records and systems remain yours.

Depending on data volume and a full review, companies with several years of records could see 100K–5M.

See if your company qualifies and get a quote.

Value Your Data