Nvidia shares fell nearly 8% in after-hours trading Wednesday after the Wall Street Journal reported that the chipmaker’s board is preparing to oust CEO Jensen Huang. The board could meet imminently to decide his future, the report said.
The stock had closed the regular session up about 3%, at $173.73, before sliding to roughly $160 in post-market trading, per Yahoo Finance. The same day, The New York Times reported that Huang had a second extramarital relationship with Kimberly Powell, Nvidia’s vice president of health care.
The turmoil began Nov. 8, when Huang admitted to an affair with Alice Huang, an executive at Singapore-based Megaspeed International whom U.S. officials believe is an agent of China’s Ministry of State Security, per the AP. The two are not related. Nvidia has since lost more than $450 billion in market value, according to CBS News.
That selloff reaches well past Wall Street. Nvidia, No. 16 on the 2026 Fortune 500, was worth about $4.1 trillion at Wednesday’s close, second only to Apple, according to Companies Market Cap. A company that size sits inside the index funds and target-date funds that anchor millions of Americans’ 401(k)s, whether those savers chose it or not.
Founded in April 1993 and public since January 1999, Nvidia became the first company ever to reach a $5.5 trillion market cap in May 2026, per Yahoo Finance. Several experts Fortune spoke with said that while the details of Alice Huang’s background and affiliations remain murky, the implications for the average investor are already fairly clear.
How much of a typical 401(k) is Nvidia
“The average American’s exposure to NVIDIA stock volatility depends on how they invest, but a reasonable estimate is 3% to 5%,” Leonard Gilroy, senior managing director of the Reason Foundation’s Pension Integrity Project, told Fortune.
“NVIDIA represents about 6% of the total market capitalization of the S&P 500 and about 10% of the total market cap of the NASDAQ100,” he said. “If an individual had 100% of their retirement invested in an S&P 500 or NASDAQ100 index fund and NVIDIA hypothetically lost 100% of its value, they could see a direct investment loss of about 5% to 10%.”
That would be the worst case, and most retirement accounts are spread far more broadly. “About 70% of 401(k)s are invested in public equities,” Gilroy said, “and many investors hold a mix of index funds and target-date funds, which reduces exposure to one company.”
Public pensions are even less exposed. The Reason Foundation estimates that Nvidia accounts for about 2.5% of the average public pension fund’s assets, Gilroy said, “since they are typically more diversified, with public equities accounting for only 46% of assets under management.”
Concentration risk remains, given how large Nvidia is relative to other holdings in the same portfolios, “so it’s worth watching, but overall the current direct exposure to NVIDIA is not a major concern for public pension systems,” he said.
The bigger risk is spillover to other AI stocks
The larger danger may be a domino effect, with a hit to Nvidia dragging down the companies that depend on its chips. “For individuals and pension funds alike, what happens to one major player in a dynamic market can spill over to other firms, such as AI companies and other large consumers of NVIDIA chips, so indirect investment risks beyond NVIDIA’s own performance can be significant,” Gilroy said.
Leadership is the other open question. Huang has run Nvidia since co-founding it in 1993, and Bloomberg has reported that the company is working with an outside firm to explore replacements. Fortune has reported on who could succeed him. The board’s investigation may also examine past statements the company and its executives made about Megaspeed.
Why experts say savers should sit tight
Jill Fisch, a professor at the University of Pennsylvania Carey Law School whose work focuses on the intersection of business and law, advises people not to fret. “Ordinary retirement accounts are invested for 20, 30, or 40 years or more,” she said. “So I would say over the long term, this is going to be a tiny blip.”
“With respect to possible outcomes, we don’t know much of anything at this point and we certainly don’t know much of anything with respect to the underlying value of Nvidia’s stock, right?” Fisch told Fortune.
“It’s common for the price of a company’s stock to fall when there is new information, when there’s a scandal, but the long-term value of Nvidia’s stock is going to be tied to the value of the company and I don’t think that the affair is something that I would expect to materially affect the value of the company,” she said.
She drew a line between the affair itself and what could follow it. “Obviously, if there are security issues or if the existence of the affair has raised questions about long-term leadership of the company, those are more problematic,” Fisch said. “But we have scandals with companies, we have scandals with CEOs. If you’re talking about investing your retirement money, what you care about is Nvidia’s business prospects over the long term.”
She pointed to Apple, whose stock swung on news of co-founder Steve Jobs’ health in the 2000s. “Think about Apple, right, and Steve Jobs and the issues when he was revealed to have pancreatic cancer, right? That had a huge impact on the company in the short term, but I don’t think anyone would disagree with the fact that Apple has been a tremendously successful investment to have in your retirement account.”
Gilroy’s advice extends to large institutional investors. “For individual investors and public pension systems alike, it’s important not to overreact to corporate headlines and to work with professional investment teams to maintain and rebalance diversified, risk-managed portfolios that don’t overly concentrate risk and avoid single points of failure,” he said.
Fisch’s advice is simpler: do as little as possible, including worrying. “The typical 401k plan puts you in a diversified portfolio with stocks, bonds, income-based securities, and overall a wide range of companies,” she said. “They’re going to go up and they’re going to go down; don’t check the value of your portfolio that often. Go play with your grandkids.”
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