China Spy Row Erases $1.6 Trillion From Nvidia's Value, About One-Third Of India's GDP

Nvidia has lost $1.6 trillion in market value since hitting its October record. The amount is equivalent to roughly one-third of India's annual gross domestic product (GDP), which stands around $4.06 trillion.Significantly, the company's market capitalisation has fallen to $4.31 trillion as of the November 9 close, from approximately $5.88 trillion when its shares touched their 52-week high. The $1.57 trillion erosion is now larger than Tesla's entire market value of around $1.49 trillion.In technical terms, Nvidia shares have entered bear-market territory, falling more than 26 per cent from their 52-week high of $243.37. The stock closed at $178.67 on November 9, down 14 per cent over the past week and 22 per cent over the past month.Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better PayNvidia's Market Cap Loss Is Bigger Than TeslaTesla, one of the world's largest companies, is worth approximately $1.49 trillion. Nvidia has effectively lost an amount greater than Tesla's entire equity value in just over a month. Photo Credit: Trading EconomicsThe sell-off comes amid concerns over the sustainability of AI spending, regulatory uncertainty and developments involving Nvidia CEO Jensen Huang.The company's board has launched an independent investigation into reports that Huang was targeted by a foreign intelligence operation involving a woman identified in media reports as a suspected Chinese intelligence operative.Huang reportedly admitted to employees that he had an affair with Alice Huang, a former executive at Singapore-based data centre company Megaspeed. A classified US intelligence memo reportedly identified her as a suspected recruit of China's Ministry of State Security. The allegations have not been independently established.Nvidia's board said it had no reason to believe that US national security or company secrets had been compromised. Huang has agreed to cooperate with the investigation and continues to serve as CEO.The developments have added to investor scrutiny at a time when Nvidia's valuation remains heavily dependent on expectations of sustained AI infrastructure spending.Nvidia Earnings Next Week Could Be CrucialInvestors will now turn their attention to Nvidia's November 17 earnings announcement. The company reported revenue of $96.2 billion in the second quarter of fiscal 2027, more than doubling from a year earlier. Its data centre business generated $89 billion, accounting for more than 92 per cent of total revenue.For the third quarter, Nvidia has projected revenue of $108 billion, plus or minus 2 per cent. The results could provide a fresh indication of whether demand for AI chips remains strong enough to support Nvidia's valuation.Despite the correction, Wall Street analysts remain largely bullish. The average 12-month price target stands at $327.14, implying substantial upside from the November 9 closing price.