‘I’ll be buying more’: Singapore investors pour into Nvidia shares on Jensen Huang’s exit

[SINGAPORE] When news broke of former Nvidia chief executive Jensen Huang being ensnared in an alleged honey trap espionage, retail investor Asiya Bakht was quick to snap up shares in the world’s biggest chip company.

“Nvidia shares had already been on a steep decline even before news of Huang’s resignation broke, so I was monitoring it closely… When the price dipped further following the announcement, I picked up a few more,” said the 52-year-old.

Her current Nvidia holding is already worth five figures, and she plans to plough more into the stock, having picked up shares throughout the week.

“I feel this temporary dip could be a major opportunity for investors like me,” said the founder of public relations company Beets PR.

She is among a wave of Singapore-based retail investors who rushed into Nvidia amid the sell-off on Thursday (Nov 12) night, betting that the company’s long-term growth prospects would outweigh the uncertainty surrounding its chief executive.

Trading activity surged in several brokerage platforms when US markets opened overnight, with investors largely buying the dip or holding on to their existing positions.

Nvidia shares had already been battered by a broader sell-off in artificial intelligence stocks, even before reports emerged over the weekend of Huang’s extramarital affairs.

But as the AI rout retraced some losses, Nvidia was hit by an alleged espionage accusation. Huang was reportedly involved with Alice Huang, a Chinese businesswoman suspected by US authorities of espionage.

The national security scandal was compounded by a governance issue when it was revealed that he also had an extramarital affair with Kimberly Powell, Nvidia’s vice-president of its healthcare business.

With the chipmaker’s board under pressure to terminate his appointment, Huang resigned on Thursday, sending Nvidia shares down another 14 per cent by the opening of US trading, and down 4.3 per cent at closing.

Thursday’s close represents an 11 per cent decline in Nvidia’s share price over the week, wiping about US$490 billion off the chipmaker’s market value over the period.

Buys placed “within minutes”

Despite the sharp sell-off, intrepid Singapore investors pounced on the buying opportunity on Thursday night.

“Customers were placing buy orders within minutes of the price drop (when US market opened),” said Arpit Agal, head of brokerage at Syfe.

Nvidia orders on the platform surged to about 13 times the daily average over the preceding six weeks on the platform, following news of Huang’s resignation on Thursday.

Seventy per cent of the clients who traded US stocks on Thursday were dealing in Nvidia.

Similarly, FSM Global recorded a surge in Nvidia trading on Thursday night. Trading volume rose to 11 times its October daily average, with Singapore clients remaining net buyers of the counter at a buy-to-sell ratio of 1.35.

Over at brokerage firm IG, trading activity among Singapore peaked on Thursday. Trading volume surged nearly six times over the past week compared with the preceding week, while the number of clients trading Nvidia roughly doubled.

The increase in activity was broad-based, spanning existing Nvidia shareholders, first-time traders of the stock and new IG clients.

“Investors are not necessarily losing faith in Nvidia’s business, but are reassessing the risks associated with iconic founder Jensen Huang’s departure,” said Jaycee Lai, head of clients at IG.

He added that client trading activity suggested that confidence in Nvidia’s underlying business remains relatively resilient.

Hedging bets

Singapore-based investors were already increasing their positions in Nvidia from earlier in the week, when news of Huang’s scandal broke out.

At FSM Global, Nvidia’s buy-to-sell ratio among Singapore clients touched 3.3 on Monday, compared with 1.1 in October.

Saxo also reported that Singapore clients remained slightly tilted towards buying, with the number of clients holding Nvidia positions increasing around 3 per cent on Thursday.

However, unlike Thursday’s spree, investors appeared more cautious earlier in the week as the controversy unfolded.

While Moomoo Singapore recorded a near three-times increase in Nvidia sell orders and shares sold between Nov 6 and 9, put option contracts rose by more than five times.

Despite the increase in selling activity, clients remained net buyers on both days. Moomoo noted that the broader technology sell-off and the usual pickup in Monday trading likely contributed to the rise in activity.

At Syfe, call options also outweighed puts by around nine to one in value, although the proportion of put orders increased from 44 to 47 per cent this week.

This suggested that some investors were hedging their positions, even as overall sentiment remained optimistic, said Agal at Syfe.

Spillover into other technology counters appeared limited at IG and Saxo, although FSM Global observed increased net buying in Nvidia rivals AMD and Broadcom.

Focus shifts to Nvidia’s leadership

With Huang’s departure, investors are now turning their attention to Nvidia’s leadership and governance, particularly the implications for its long-term strategy.

Nvidia has appointed chief financial officer Colette Kress as interim chief executive while it searches for a permanent replacement.

Huang’s central role in Nvidia’s technology direction, product strategy and customer relationships makes any leadership transition a tough challenge, said You Weiren, senior portfolio manager at FSM Global.

Nevertheless, he remained positive on Nvidia’s fundamentals, citing continued AI demand.

However, he warned that further volatility could emerge around its earnings announcement on Nov 17, and a congressional briefing scheduled for Nov 18.

Not all investors have thrown caution to the wind.

Marc Low, a product manager at a financial-services company, has yet to make any trades on the counter this week.

The 43-year-old is waiting to see how the company navigates the “power vacuum”, as it searches for a suitable successor to Huang.

For others such as Joel Tan, Huang’s departure from Nvidia spells the death knell for its share price.

The 29-year-old banker intends to sell his holdings. “Under Huang’s leadership, Nvidia has grown into a trillion-dollar company and delivered strong stock performance. It would be difficult to replace that kind of track record.”