TOP STORY
🇨🇳 Nvidia Crashes 12% Amid Jensen's Affair: Should You Buy the Dip?

☀️ Happy Sunday, everyone! After four straight red weeks, markets finally got a win. Across the indexes:

• The S&P 500 rose +2.51%, its best week since early August

• The Nasdaq rose +2.3%

• The TSX rose +0.89%

😅 But while most of the market was bouncing back, one company was crashing amid perhaps one of the most insane corporate scandals of the decade…

😬 That company was of course, none other than Nvidia ($NVDA).

📉 But while most of the 1000s of hilarious memes this week (including the music video parody we made) focus on CEO Jensen Huang’s not-1, not-2, but 3 affairs (with 2 employees and an alleged Chinese spy), today we’ll focus on what all this means for the stock, and why there’s more to the story than a simple CEO affair.

😳 So What Actually Happened

🕵️ Here’s the timeline in case you missed it:

• 🗞️ Oct 29: The New York Times reports US intelligence believed an executive close to Jensen Huang was passing information to China

• 💔 ~Friday, Nov 6: After telling the board he'd been intimate with a business executive, Huang admits in a letter to all employees that he'd been unfaithful to his wife, taking "full responsibility"

• 🔍 Sunday, Nov 8: Nvidia's board opens an independent investigation, saying Huang may have been the "target of a foreign intelligence effort"

• 📰 Through the week: reports surface that there were three affairs, two with Nvidia employees and an alleged Chinese spy… while Bloomberg reports Huang had been denying the affair internally since late 2025

• 🚪 Thursday: Huang resigns as CEO, president, and board member, effective immediately, ending a 33-year run. CFO Colette Kress becomes interim CEO.

🇨🇳 The most significant of the 3 affairs was with Alice Huang (the alleged spy), who controls a Singapore cloud company called Megaspeed, which US investigators say moved roughly $7.5 billion of Nvidia chips into China through shell companies (the focus of today’s story).

📉 As a result of the scandal, the stock ended the week down 13%, 33% below last month's record high of $243.

🇨🇳 Why Do Investors Care So Much About An Affair?

👀 CEO affairs are nothing new, and it’s quite rare for a CEO to step down after one… so why was Nvidia different?

❌ Well, it comes down to China. The US bans Nvidia from selling its most advanced AI chips to China, so those chips can only get there through backdoors.

🔍 Bloomberg's analysis found Megaspeed's Nvidia imports topped $4.6 billion, with volumes surging right before global export curbs took effect… and if those chips really did flow through shell companies into Chinese hands, the question stops being about Huang's marriage and becomes whether Nvidia was helping China get around US export controls.

💬 As Scott Bessent, US Treasury Secretary, puts it:

🔎 And the paper trail is eyebrow-raising to say the least… since US chip export bans hit, China's share of Nvidia's reported revenue fell from 12% to 6%… while Singapore's share doubled from 10.6% to 21.9%. Nvidia then stopped reporting sales by billing location altogether in October 2025:

🌼 Blossom Buys The Dip

💪 While Wall Street debated what Nvidia is worth without Jensen, the Blossom community made up its mind fast, with a record $23 million of $NVDA traded on the day Jensen resigned (13x an average 2026 day) with 86% of investors net buying.

🛒 Across the full week, dollars bought outweighed dollars sold by more than 2-to-1 ($48 million vs. $22 million).

🤔 But was all this dip buying the right call? Let’s look at the arguments for and against buying the Nvidia dip… but first, a quick word from our sponsor this week: BMO ETFs!

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TOP STORY CONT.
⚖️ So… Is Nvidia Still a Buy Without Jensen?

🤔 Before you join the Blossom dip-buyers, it's worth hearing both sides… because the scandal creates real problems for the company beyond just Jensen’s naughty deeds.

🔑 1) Nobody knows who runs Nvidia next

🏗️ Nvidia had no succession plan, with around 60 senior leaders reporting straight to Huang… so his exit leaves a big leadership void.

📣 Baird analyst Tristan Gerra predicts a permanent CEO might not be picked until as far away as 2027 and expects an outsider… while other reports say the search is already down to three or fewer names, all big external ones, with top Apple executives being contacted.

🗺️ But Jensen will be hard to replace, with Jensen personally driving the product roadmap, and as Yahoo Finance's Sozzi put it, "it's hard to envision where the company will be 18 to 24 months from now without him".

🇨🇳 2) ‘China’ revenues could evaporate

🚨 Nvidia's own forecast already assumes zero data centre revenue from China… but if a meaningful chunk of Singapore's 21.9% of revenue is really disguised China demand (as the Megaspeed case suggests), then "China exposure" isn't the official 6% that's already written off… it could be closer to a fifth of Nvidia's revenue that tighter enforcement could claw away.

🏛️ And enforcement is coming, with Congress already calling hearings, with Huang, Nvidia's general counsel Tim Teter, and Commerce Secretary Howard Lutnick all expected to testify over the next month about both Huang's conduct and potential export-control violations.

💰 3) The $132 billion overhang

🤑 Huang walks away still owning about 3.6% of Nvidia, a stake worth roughly $132 billion… and now the clock on when (and whether) he sells becomes its own market story.

💍 $11 billion of that sits in his own name, the other ~$121 billion sits in family trusts, including one he runs with his wife, Lori… so his marriage is now a weirdly real factor in what happens to those shares.

🗓️ Legally, he can sell today, but for three months after leaving, he still counts as an insider (meaning any big sale needs a public SEC filing) but this ends in February just before Nvidia's annual report.

😮‍💨 To be fair, his entire stake equals less than six days of Nvidia's typical trading volume, and the company has $235 billion of buyback capacity left… enough to absorb every share he owns.

💪 The Case That Nothing Has Changed

🗣️ The dip-buyers argument was best summed up by Wedbush's Matthew Bryson:

📝 Morgan Stanley's Joseph Moore agrees, saying his firm's view of a "strong, durable AI buildout" is unchanged… while noting near-term uncertainty will persist since Huang was "crucial to the company's strategic direction."

🧠 Nvidia's sales are effectively locked in for this quarter and next (the chips were ordered long ago), so at least in the near term we shouldn’t see much impact on Nvidia’s bottom line.

💰 And with the recent price drop, Nvidia is now trading at roughly 11-13x next year's expected earnings (vs. about 18x for the S&P 500)… for a company whose revenue grew 106% last quarter, with Q3 guidance at $108 billion… this is looking objectively ‘cheap’.

🎯 Analysts overall have Nvidia rated as a ‘moderate buy’ with a $248 price target, 52% above the current price.

🧭 So, Should You Buy?

🤷‍♂️ In my opinion, it’s a toss-up. The price-earnings ratio is looking incredibly low, and the market often overreacts to bad news, so I would usually lean toward buying in situations like this.

⚠️ But the biggest risk to me is from the ~20% of revenue coming from Singapore, and whether that is real revenue or chips bypassing US export controls… so it’s not as simple as a regular affair.

🗓️ Luckily, we won’t have to wait long for new info: Nvidia reports Q3 earnings Tuesday, with analysts expecting revenue to jump about 91% to $108.7 billion… excited to keep hearing everyone’s thoughts on Blossom.

💡 But one thing is for sure - this week was a masterclass for investors on the value of diversification. While the market was soaring, one man’s cheating scandal brought one of the most popular stocks to its knees.

🧩 And here’s the uncomfortable part: no amount of research would have protected you. You can model data centre demand and read every earnings call, but you can’t model your CEO’s personal life… and that’s exactly the kind of risk diversification exists for.

📊 The heatmap above makes the point best, the money that fled Nvidia didn’t even leave the AI trade… it just moved next door, with AMD +18.9%, Broadcom +18.2%, and Micron +12.8% this week. So someone holding the chip sector had one of their best weeks of the year, someone holding the whole market had its best week since August… and only the investor holding Nvidia alone was down -13%.

🔍 So use this week as a reminder to check how much of your portfolio is riding on any single ticker (you can do this on Blossom PRO with our portfolio overlap feature, which adds your direct exposure to how much you hold in ETFs):

😎 All right - before we wrap up, 3 quick stories: the two biggest neoclouds reported earnings, and an AI giant just set the date for the second-biggest IPO ever… right after a quick word from our other sponsor!

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IN OTHER NEWS

🗞️ Other Big Headlines

☁️ CoreWeave Jumps 25% on a Massive Backlog and Raised Guidance

• 🔙 Now, continuing from last week (read here) where we mentioned both CoreWeave and Nebius would report earnings… well, here it is:

• 🟢 First, CoreWeave (CRWV) reported on Wednesday, showing revenue of $3.66 billion vs. $3.55 billion expected, up 168% year-over-year, compared with a loss of -$1.27 per share vs. -$1.16 expected, while also raising full-year revenue guidance to $13.0-13.3 billion, helping the stock jump almost 25% on Wednesday

• 📝 While the company’s quarterly net losses widened to $709 million, up from $110 million a year ago, its backlog jumped to $132.5 billion from $104 billion a quarter ago.

• 🔮 CoreWeave CEO Michael Intrator said, “Demand for the infrastructure is and remains overwhelming,” noting that the comapny is about 10x oversubscribed on its remaining 2027 capacity. Shares remain down about 33% year-to-date.

⏳ Nebius Falls 16% as Delays Overshadow a Beat

• 🚀 A day later on Thursday, Nebius ($NBIS) reported, showing revenue of $980.8 million vs. $907.5 million expected, up 571% year-over-year, with losses per share of -$0.31 vs. -$0.69 expected.

• 🔭 Management currently expects 2027 revenue to be about $12-13 billion on $40 billion to $45 billion of CapEx, though shares still sank about 16% after pushing back its target of $7 billion in annualized revenue from December to February and lifting 2026 CapEx to about $27 billion.

• 🗣️ Management’s defence was that the changes to 2026 guidance are about timing, not demand. But for a company that has its 2026 CapEx at roughly 9 times revenue (at the low end of their own CapEx guidance), any minor change hits investors the wrong way.

• ⚠️ In all fairness though, Nebius’ drop wasn’t only due to earnings, with Bloomberg reporting just a week prior stating that Microsoft ($MSFT) was tightening oversight of neocloud projects (Microsoft’s contract with Nebius is worth up to about $17 billion).

🤖 Anthropic Sets IPO Price Range, With IPO As Early As Next Week

• 💰 Lastly, Anthropic updated its S-1 this week, setting a range of $70-$78 per share for its upcoming 825 million shares on the Nasdaq (ticker $ANT; see Blossom’s stock page here), coming to a potential raise of about $64.4 billion, which would make it the second biggest IPO in history, after SpaceX ($SPCX).

• 📊 This raise also values it at roughly $1 trillion on basic shares and up to $1.4 trillion fully diluted, above its $965 billion funding round in May but below the $1.5 trillion to $2 trillion we flagged when it first filed.

• 🗓️ Pricing is expected Wednesday, Nov 18, with the first trade on Thursday, Nov 19 (next week)!

FROM THE BLOSSOM COMMUNITY
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