NVIDIA Corporation (NVDA.US) ends two-day losing streak, announces hiring of prominent law firm to investigate matters related to CEO Jensen Huang

NVIDIA Corporation (NVDA.US) shares rose 2.87% on Wednesday, ending a two-day losing streak. The stock fell 4.3% and 5.47% on Monday and Tuesday, respectively. Recent personal controversies surrounding CEO Jensen Huang have continued to intensify, sparking investor concerns about management stability, corporate governance, and potential business risks. NVIDIA Corporation announced on Tuesday that it has hired prominent law firm Wachtell, Lipton, Rosen & Katz to conduct an internal investigation to assess whether the relevant events could potentially affect the company's interests and business operations. The investigation has not yet released its findings, and the market is closely watching developments and their potential impact on the company. According to media reports citing people familiar with the matter, Jensen Huang returned to the office on Monday and sought to signal to the outside world that the company's business was operating as usual. He also continued to chair meetings in the office on Tuesday. As NVIDIA Corporation plans to release its quarterly earnings on November 17, investors are assessing whether the related uncertainties could affect the company's operating performance and future development. Bank of America Corp analyst Vivek Arya outlined three possible scenarios in a research note published on Tuesday. The first is that the impact of the events is contained, company management remains stable, and business operations are not significantly disrupted; the second is that related uncertainties persist, putting pressure on NVIDIA Corporation's valuation ahead of the earnings release; and the third is that the events escalate further, leading to management changes or a tighter regulatory environment, which would force the market to reassess the company's earnings outlook. Zacks Chief Equity Strategist John Blank said that NVIDIA Corporation's recent selloff reflects investor concerns about subsequent developments and potential regulatory risks. He believes the matter could not only adversely affect NVIDIA Corporation and Jensen Huang personally, but could also weigh on investment sentiment across the entire AI sector. Meanwhile, Morgan Stanley announced on Wednesday that it has removed NVIDIA Corporation from its list of top picks. The bank noted that since it added NVIDIA Corporation to its top picks on October 2, the stock has fallen more than 25% cumulatively, triggering the research department's stop-loss policy for top picks. Morgan Stanley analysts emphasized that Jensen Huang's leadership is critical to NVIDIA Corporation's strategic direction. However, this adjustment does not mean the bank's view on NVIDIA Corporation's long-term fundamentals has changed. Morgan Stanley remains overweight on NVIDIA Corporation with a 12-month price target of $300. The bank believes that global AI infrastructure buildout still has strong and sustainable growth momentum, and NVIDIA Corporation's leading position in AI computing is expected to continue. But in the near term, uncertainty surrounding the company's management could still weigh on market sentiment. As NVIDIA Corporation prepares to report quarterly earnings, investors will not only focus on AI chip demand, revenue growth, and forward guidance, but will also closely watch whether the company's management can stabilize market confidence and whether the relevant events will further affect business operations.