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“China’s scientific progress relies on independent innovation and open cooperation,” Foreign Ministry spokesperson Mao Ning said.
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Oppenheimer downgraded Nvidia’s rating to ‘Perform’ from ‘Outperform’ and removed its price target.
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Retail sentiment for NVDA was ‘extremely bullish’ on Thursday.
Nvidia (NVDA) shares fell nearly 7% in early premarket trading on Thursday, continuing their slide after CEO Jensen Huang admitted to an extra-marital affair with a person suspected to be a Chinese spy and the company launched an investigation.
The latest pressure came as reports said Huang might have had a second affair, this time with vice president of health care, Kimberly Powell, and that the company’s board is considering removing him from his post. Stocktwits looked at the potential replacements that might be in the running.
On Thursday, China, which previously said it had no involvement in the Huang saga, said that the U.S. should not use allegations of Chinese spying on Jensen to justify technology restrictions, according to a Bloomberg report.
“China’s scientific progress relies on independent innovation and open cooperation,” Foreign Ministry spokesperson Mao Ning said at a regular press briefing in Beijing on Thursday when asked about the Nvidia episode and its potential impact on bilateral ties.
“The US should stop fabricating the so-called Chinese spy narrative as a pretext for imposing technology restrictions,” she added.
The Information reported on Wednesday that the U.S. Commerce Department is finalizing a semiconductor control update that would prevent remote access and chip smuggling into China via data centers.
Wall Street Grows Cautious
Oppenheimer downgraded Nvidia’s rating to ‘Perform’ from ‘Outperform’ and removed its price target, saying that Huang’s role as the face of AI cannot be overstated and his departure presents a material, potentially thesis-changing event, according to an Investing.com report.
Earlier in the week, Bernstein slashed its rating on Nvidia shares to ‘Market Perform’ from ‘Outperform,’ according to TheFly. The investment research firm trimmed its price target by half to $200, which now implies a 15% upside.
Commentators broadly believe Nvidia might weather the storm, but with great difficulty, with a high chance of Huang being booted out as CEO.
The Nvidia Fallout
The New York Times reported last month that Huang had a relationship with Alice Huang, a former executive at Singapore-based computing firm Megaspeed, whom U.S. authorities investigated and concluded was a Chinese intelligence asset.
