Nvidia Shares Plunge 6% as Microsoft Overtakes Chipmaker as World’s Second-Most Valuable Company

Nvidia shares plunged more than 6% on Tuesday, allowing Microsoft to overtake the artificial intelligence chipmaker as the world’s second-most valuable publicly traded company, amid concerns surrounding an investigation into CEO Jensen Huang and growing investor uncertainty over the outlook for artificial intelligence.

Microsoft shares slipped around 0.4% to approximately $543, while Nvidia shares fell to nearly $167. The decline pushed Nvidia below Microsoft in global market capitalisation rankings for the first time since June 2025, with Apple retaining its position as the world’s most valuable company.

Nvidia has lost more than $400 billion in market value since reports about the controversy emerged over the weekend.

The controversy follows Nvidia’s board announcement on Sunday that an independent committee of directors, assisted by outside legal counsel, would investigate allegations involving Huang and a suspected foreign intelligence operation.

The investigation comes after reports alleged that Huang had maintained a close relationship with Alice Huang, a Chinese executive formerly associated with Singapore-based data centre company Megaspeed, who is not related to the Nvidia chief executive. US intelligence officials reportedly determined that she had been passing information to Beijing.

Huang acknowledged in a message to employees that he had been unfaithful to his wife, apologised and pledged full cooperation with the board’s investigation.

Nvidia’s board said it had “no reason to believe that either national security or NVIDIA secrets were compromised”, while stressing that it would examine all available information. It also expressed confidence in Huang and the company’s leadership team.

US President Donald Trump said the FBI was looking into the matter but indicated that he believed Huang would be “in good shape”. China, meanwhile, has rejected the allegations of espionage.

The controversy has added to existing investor concerns about the sustainability of the artificial intelligence boom, which has driven Nvidia’s extraordinary growth and made it one of the world’s most valuable companies.

Despite the recent setback, Nvidia remains a key supplier of advanced processors powering the global expansion of artificial intelligence infrastructure. However, the combination of corporate governance concerns and growing market caution has unsettled investor confidence and reshaped the valuation rankings of the world’s leading technology companies.