Nvidia shares extended their losses for a second consecutive trading session on Tuesday, falling as much as 6% intraday and closing down about 5.5%. The two-day selloff has wiped out approximately $430 billion in Nvidia's market value.

Nvidia significantly underperformed other major technology stocks on Tuesday, making it one of the biggest drags on the broader market.

Microsoft fell 2.2%, Alphabet slipped about 0.4%, Meta finished roughly flat, Apple lost around 0.6%, Tesla gained 0.5%, and Amazon rose approximately 1.5%. The S&P 500 declined about 0.4%, while the Nasdaq 100 fell 0.6%.

During intraday trading, Microsoft briefly overtook Nvidia to become the world's second-most valuable publicly traded company. However, Nvidia regained the position before the closing bell. Microsoft's shares came under additional pressure after Anthropic unveiled a new suite of AI productivity tools that could compete with some of Microsoft Office's core features.

Shareholder Lawsuit Adds to Corporate Governance Pressure

Alongside the stock market selloff, Nvidia is facing growing legal and corporate governance challenges.

A shareholder filed a proposed class-action lawsuit against Nvidia and CEO Jensen Huang in a California federal court on Monday, alleging that they misled investors about Huang's relationship with a woman suspected of having links to Chinese intelligence and the potential national security implications.

The complaint alleges that Nvidia and Huang failed to disclose material information about the relationship and issued misleading statements regarding the company's business dealings with Singapore-based Megaspeed. The plaintiff argues that the alleged omissions exposed Nvidia to reputational and business risks that investors were not adequately informed about.

The lawsuit seeks unspecified damages on behalf of investors who purchased Nvidia shares between October 9, 2025, and November 8, 2026. The allegations have not been proven in court, and Nvidia had not immediately responded to a request for comment, according to The Associated Press.

The lawsuit follows Nvidia's board decision to launch an independent investigation into reports that Huang had been the target of a foreign intelligence effort. On Tuesday, the board's independent directors announced that they had retained former acting U.S. Attorney Joon H. Kim and law firm Wachtell, Lipton, Rosen & Katz to conduct the investigation.

The board previously said it had no reason to believe that U.S. national security or Nvidia's confidential information had been compromised, while emphasizing that the investigation would examine all available information. Huang has expressed support for the review and pledged full cooperation.

AI Investment Concerns and Executive Risks Create Dual Pressure

Beyond the governance concerns surrounding Huang, questions about the sustainability of AI infrastructure spending are also weighing on investor sentiment.

As a key supplier in the AI computing supply chain, Nvidia's stock performance is closely tied to expectations for data center investment by major technology companies. Any signs that AI infrastructure spending may slow or fail to generate sufficient returns could put additional pressure on the company's growth outlook and valuation.

At the same time, Huang's leadership is closely associated with Nvidia's corporate strategy and long-term development. The investigation has therefore raised questions about management stability, potential reputational damage and succession planning, adding another layer of uncertainty for investors.

Nvidia's sharp underperformance relative to other major technology stocks over the past two sessions suggests that investors are reassessing both company-specific risks and broader concerns about the AI investment cycle.

In the near term, developments in the board's investigation, the shareholder lawsuit and questions surrounding management stability could remain important drivers of Nvidia's share price. Over the longer term, the sustainability of AI infrastructure investment and the returns generated from data center spending will remain central to how investors assess Nvidia's growth prospects and valuation.