Nvidia Shares Tumble Into Bear Territory Amid China Probe and Google Chip Rivalry

Nvidia, the powerhouse behind the AI surge, has entered a bear market. Its stock dropped to roughly $177 on Monday, 26% below the record high set in October, as a China espionage controversy engulfed its chief executive.

A bear market is defined as a decline of 20% or more from a peak. Since Nvidia is held in most major US index funds, ordinary investors are feeling the impact as well.

A China Smuggling Investigation Reaches the Justice Department

Nvidia's board launched an inquiry on Sunday after CEO Jensen Huang acknowledged a relationship with Alice Huang, who US intelligence reportedly believed was a Chinese spy.

A greater risk may lie with her former employer, Megaspeed. The Singapore-based company purchased billions of dollars' worth of Nvidia hardware for Chinese clients. US authorities suspected some of those chips were illegally moved into China despite export restrictions.

Commerce Department investigators referred that case to the Justice Department after Nvidia's lawyers reached out to them, citing approval from a senior official, according to The New York Times.

The Times found no evidence that Nvidia influenced the outcome, and the company says it opposes smuggling. Nevertheless, former SEC Chair Gary Gensler expects serious consequences.

“Once they get the results of the investigation, they’ll have some tough choices,” he said.

Google Unveils Two Chips to Compete With Nvidia

Amid the espionage troubles, Google introduced two AI chips on Monday designed to challenge Nvidia's offerings. Anthropic, Meta, and Oracle already use its tensor processing units (TPUs), and OpenAI is reportedly planning to purchase them.

$GOOGL $NVDA – GOOGLE ESCALATES AI CHIP WAR WITH NVIDIA

Alphabet is launching two specialized AI chips, TPU 8tx and 8i Max, targeting secure computing and advanced AI workloads as it challenges Nvidia

Google's TPUs reportedly cost around 30% less than Nvidia GPUs, offering…

— Walter Bloomberg (@DeItaone) November 9, 2026

Bloomberg Intelligence projects TPU sales will grow from roughly $12 billion this year to more than $135 billion by 2028. Alphabet's stock gained 2.4%, reaching nearly $295.

Why Some Investors See a Floor for Nvidia

Nvidia shed about 12% over five trading days, deepening Wall Street's $2.5 trillion selloff.

Analyst sentiment also deteriorated sharply. CryptoQuant's analyst consensus index dropped from +0.4 on October 10 to -2.6 on November 9, its most pessimistic reading ever recorded.

CryptoQuant CEO Ki Young Ju noted that the narrative changed from "AI supercycle" to "dot-com bubble" within four weeks. Still, he sees a silver lining.

“Extreme bearishness often signals the end of selling, not the start,” he wrote.

Investor Anthony Pompliano added that it would be "objectively hilarious" if Huang's ongoing problems marked the low point of the AI downturn.

It would be objectively hilarious if Jensen’s affair marked the bottom of the AI sell-off.

The market gods sacrificed the reputation of the AI godfather in order to purge the bad spirits.

— Anthony Pompliano 🌪 (@APompliano) November 9, 2026

The board's conclusions and Nvidia's upcoming earnings will determine whether that bet pays off.