Nvidia makes the chips that power much of the world’s artificial intelligence, which makes it one of the most valuable companies on earth. So naturally, the story investors are discussing this week is not the chips. It is a soap opera. Reports that the company has opened a security review involving its chief executive’s personal life have sent analysts back to their spreadsheets, and not to update the revenue figures. There is now, apparently, a line item for plot twists.
Here is the mechanism, stripped of the fun. A share price is supposed to reflect how much profit a company will earn over the coming years. A scandal reflects how many people will be distracted from that for a few weeks. Those are different things, but markets have never been good at telling them apart before lunch.
The part that should worry you is not the gossip. It is the strategy. If boardroom drama can move a multi-billion-dollar company’s stock, every executive now has a reason to treat a rumour the way they once treated a product launch. Expect investor days that end on a cliffhanger, quarterly earnings calls (the company’s regular profit reports) with a teaser at the close, and annual reports that finish on a question mark.
What should you do? Ignore the headlines about personal lives and check one thing: is the company still making the money it made last quarter? Your savings do not need a spy thriller. They need the dull, reliable thing that never makes the news, which is the whole point of them.