Nasdaq ignores Nvidia influence as Huang faces spying probe

Hello, this is Leonie Kidd from today’s Morning Squawk.

Adding to the trouble, news broke over the weekend that NVIDIA CEO Jensen Huang, the so-called “pioneer of AI,” was having an affair with a woman who U.S. intelligence agencies believe was a Chinese spy.

The news sent shockwaves through the market, with investors scrambling to assess the potential impact on the AI ​​industry more broadly.

Nvidia CEO Jensen Huang admitted to having an affair with a woman suspected of being a Chinese spy and apologized to his family, the company, and investors.

The stock has been under heavy selling pressure in pre-market trading and is currently down more than 5%, and down more than 6% in Frankfurt.

What we know so far:

Jensen Huang admitted to having an affair. US intelligence agencies reportedly expressed concern that the woman, Alice Fan, was passing information to the Chinese government. Alice Huang works for Megaspeed, a Singapore-based cloud company that is a customer of Nvidia. Megaspeed is accused of helping regulated Chinese companies acquire AI chips. Nvidia’s board of directors has launched an investigation into the allegations, and China’s Ministry of Foreign Affairs has said that “the so-called Chinese spy story is completely baseless.” President Donald Trump reacted to the news, saying, “I think he’s an honorable man. I think he probably has an excuse.” You can read all about Jensen Huang’s email to staff and the statement from NVIDIA here.

Analysts have struggled to assess the impact. Yorkville Ives and co-partner Dan Ives called this a “black-out moment for Jensen” and expected the stock to soar. Ben Emons of Fed Watch Advisors highlighted NVIDIA’s “key person” risks. He added that if Jensen Huang takes leave or resigns, NVIDIA may ask the next person to step up.

Colette Kress, CFOIan Buck, VP and General Manager of HyperscaleBryan Catanzaro, VP of Applied Deep LearningJay Puri, VP of Worldwide Field Operations, Debora Shoquist, VP of Operations

Nvidia’s moves continue to pressure Nasdaq futures, with the index sliding in and out of the red this morning. Dow futures and S&P futures are hovering just above the flatline.

What’s coming: Guests like former Rep. Kevin McCarthy (R-Calif.), Sen. Marsha Blackburn (R-Tenn.) and former Secretary of State Antony Blinken appear on “Squawk Box,” which garners more views throughout the day.

Nvidia is pushing down certain parts of the market in early trading. intel, micron and Qualcomm That too in the red.

but, broadcom and AMD It’s higher.

It was a solid day of trading for some of Asia’s biggest chip stocks, with TSMC, Samsung and SK Hynix all rising despite intense scrutiny surrounding Nvidia.

CNBC Source: CNBC’s Seema Modi interviews an Nvidia investor close to Jensen Huang who says he could take a leave of absence if the investigation impairs his leadership. But the person said Hwang would not step down or be expelled unless there are further circumstances. Analysts’ take: “NVIDIA is no ordinary company and Jensen is no ordinary CEO,” Bernstein said, adding, “The overhang will continue for some time.” Cramer’s Take: Members of our investment club can get Jim Cramer’s immediate reaction to the news and what it means for stocks here.

Berkshire Hathaway doubled its stock buybacks in the third quarter, buying back about $9.6 billion of its own stock.

This was due to a decline in the group’s operating profit of 5.8% due to a decline in insurance underwriting and investment income.

Why it matters: Berkshire stock has benefited from a rotation in tech stocks and outperformed. The stock has increased 13% since the beginning of the year, outpacing the S&P’s 7.8%. Please pay attention. Greg Abel’s group kept its holdings the same in five major technology, consumer and banking companies.

CNBC’s Leslie Picker will be broadcasting live from the Goldman Sachs Alternative Investment Conference and speaks exclusively with CEO David Solomon.

Why it matters: Solomon recently questioned the broader impact of the frontier model, citing its importance in specific areas such as cybersecurity and defense, but remained skeptical of its widespread adoption. Succession planning: Goldman recently denied reports that deputy general manager John Waldron was preparing to succeed Mr. Solomon as early as next year, saying there was “no timeline” for a change in leadership.

Waves of threats are testing Europe’s defenses

Cyber ​​attacks, bomb threats against airliners, civil unrest and suspected sabotage across Europe have raised questions about the continent’s resilience and how well-prepared it is to protect itself from modern security threats.

Last week, hackers remotely controlled the refrigeration systems of supermarkets across Europe, forcing retailers to throw away rotten food and exposing vulnerabilities in everyday infrastructure.

—CNBC’s Jason Gewirtz, Fred Imbert, Jim Cramer, Terry Cullen, Lim Hui Jie, April Roach and Elsa Oren contributed to this report.

John Meloy edited this version.