Nvidia (NVDA.US) ended a two-day losing streak and announced the hiring of a well-known law firm to investigate the incident involving CEO Hwang In-hoon

The Zhitong Finance App learned that Nvidia (NVDA.US) shares rose 2.87% on Wednesday, ending the previous two consecutive trading days of decline. The stock fell 4.3% and 5.47% on Monday and Tuesday, respectively. Recently, personal disputes surrounding the company's CEO, Wong In-hoon, have continued to ferment, raising investors' concerns about management stability, corporate governance, and potential business risks.

Nvidia announced on Tuesday that it has hired well-known law firms Wachtell, Lipton, Rosen & Katz to conduct an internal investigation to assess whether the incident had a potential impact on the company's interests and business operations. At present, the results of the investigation have not been announced, and the market is closely monitoring the development of the situation and its possible impact on the company.

According to media reports, citing people familiar with the matter, after returning to the office on Monday, Hwang In-hoon tried to send a signal to the outside world that everything was normal in the company's business. He also continued to chair meetings in his office on Tuesday. As Nvidia plans to release its quarterly earnings report on November 17, investors are evaluating whether related uncertainties will have an impact on the company's operating performance and future development.

Bank of America analyst Vivek Arya proposed three possible scenarios in a research report released on Tuesday. The first type is that the impact of the incident was controlled, and the company's management remained stable and business operations were not clearly disrupted; the second type was that related uncertainty continued, putting pressure on Nvidia's valuation before the financial report was announced; the third type was that the incident further escalated, leading to management changes or a tightening of the regulatory environment, which in turn forced the market to re-evaluate the company's profit prospects.

John Blank, chief stock strategist at Zacks, said that Nvidia's recent sell-off reflects investors' concerns about subsequent developments and potential regulatory risks. He believes that this incident may not only have an adverse impact on Nvidia and Hwang In-hoon himself, but may also hurt investment sentiment in the AI sector as a whole.

Meanwhile, Morgan Stanley announced on Wednesday that it would remove Nvidia from its list of preferred stocks. The bank pointed out that since Nvidia was listed as the preferred stock on October 2, its stock price has dropped by more than 25%, triggering the research department's stop-loss policy for preferred stocks.

Morgan Stanley analysts emphasized that Wong In-hoon's leadership is critical to Nvidia's strategic direction. However, this adjustment does not mean that the bank's judgment on Nvidia's long-term fundamentals has changed. Morgan Stanley still maintains Nvidia's “Overweight” rating and a 12-month price target of $300.

The bank believes that global AI infrastructure construction still has strong and sustainable growth momentum, and Nvidia's leading position in the field of AI computing is expected to continue. In the short term, however, uncertainty surrounding the company's management may still put pressure on market sentiment.

As Nvidia is about to release its quarterly earnings report, in addition to focusing on AI chip demand, revenue growth, and future performance guidance, investors will also pay close attention to whether the company's management can stabilize market confidence and whether related events will have a further impact on business operations.