Nvidia Stock Falls Nearly 5% as Citi Cuts US Stocks to Neutral

Nvidia stock fell nearly 5% in US premarket trading on Monday, November 9, the first session since its board opened an investigation into CEO Jensen Huang, according to Reuters and CNBC. At those levels the chipmaker would lose around $250 billion in market value, Reuters calculated. The same morning, Citi cut US equities and global tech to Neutral from Overweight, a sign that the AI trade's problems now go beyond one company.

The two moves pull in different directions. Asian chip stocks rose on Monday and most of US tech pointed higher before the open, so the Nvidia drop looks like a company-specific discount for governance risk. Citi's call is broader: it says AI sentiment and investor positioning are still too shaky to justify an overweight bet on US stocks.

-4.8%

Nvidia in premarket trading Monday, per CNBC

~$250B

Market value at risk at premarket levels, per Reuters

-13%

Nvidia's drop through Friday since the first reports, per Axios

Nov 17

Nvidia's next quarterly earnings report

Why Nvidia stock is falling while Asian chip stocks rise

Nvidia's board said on Sunday that a committee of independent directors, assisted by outside counsel, will investigate reports that Huang was targeted by a Chinese intelligence effort through his relationship with Alice Huang, an executive at Megaspeed. Huang admitted to an affair in a memo to staff. We covered the details in Nvidia Investigation: Board Probes Jensen Huang's Alleged Spy Link.

Axios reported the shares were down 4.4% at 5:15 a.m. ET, on a day that tech stocks were otherwise broadly higher, and that the stock had already lost 13% through Friday since the first reports about the relationship. CNBC put the premarket decline at 4.8% later in the morning. In Asia, Reuters reported that TSMC closed 4.7% higher, while Samsung rose 0.6% and SK Hynix 0.4%. CNBC said Intel, Marvell, Qualcomm and Arm were each down more than 1% before the US open.

Not every analyst sees lasting damage. Bernstein analysts led by Stacy Rasgon called the espionage allegations so far "more form than substance," though a "(very) bad look," Investing.com reported. Citi also listed governance, regulatory scrutiny and export-control compliance on H200 chip sales to China as the issues to watch. Senior House Republicans have asked Huang to brief Congress this month, with no date set. Huang owns about 3.6% of Nvidia, according to LSEG data cited by Reuters.

Citi cuts US stocks and global tech to Neutral

In a note reported by Investing.com on Monday, Citi's strategists tactically downgraded US equities, global tech and European tech to Neutral from Overweight, citing the risk that investor positioning could fall further. They upgraded European stocks outside the UK to Overweight, saying the region is less exposed to tech and benefits more from falling oil prices. In Europe they also raised food and beverage to Overweight and kept Overweight ratings on materials and health care.

The reasoning centers on sentiment. Citi said AI sentiment had plunged, partly because the midterm results raised questions about the long-term path of AI spending. It also noted that credit spreads have widened and earnings revisions have slowed. Positioning in the Nasdaq could slip from roughly neutral into net-short territory, and Citi estimated that another 5% drop would be needed for positioning to turn properly negative.

The bank said it remains constructive on AI over the medium term but wants cleaner positioning, steadier AI sentiment and stable earnings revisions before going back to Overweight. The call builds on a note from Friday, also reported by Investing.com and Yahoo Finance, in which Citi said it preferred Europe to the US for now and argued that the pullback before the midterms was driven mostly by AI financing worries and oil rather than the election itself.

What last week's AI selloff left behind

Both moves follow one of the sharpest days for AI stocks in years. On Thursday, November 5, the Nasdaq 100 fell 6.3% and the S&P 500 dropped 4.4%, their worst days since April 2025, while the Philadelphia semiconductor index lost 12.3%, its worst day since March 2020, NBC News reported. Nvidia fell 9.2% that day. Our AI stocks crash report covers the session, and our Nvidia earnings preview explains what the company has guided for the quarter.

What the AI Bubble Index says

The AI Bubble Index read 63.9 after Friday's close, in its Normal band, up from 62.9 a week earlier. The reading does not yet include Monday's trading. Sentiment and attention remains the hottest family at 92.5, while the demand gap is the coolest at 40.1. Fragility, at 69.8, sits slightly above Euphoria at 66.5. A strategist downgrade and a single stock's governance discount are the kind of signals the sentiment and systemic risk families track over weeks, so one session will not move the reading much. The dashboard shows each component.

A single key person at the most valuable AI chipmaker is a form of concentration risk. Our guide to Magnificent Seven stocks explains how a handful of companies came to drive so much of the index, and why company-specific news can move the whole market.