Why is Nvidia stock surging today after a two-day crash that wiped out $480 billion? Investors buy the dip as NVDA rebounds despite Jensen Huang controversy ahead of November 17 earnings

Nvidia stock (NVDA) surged nearly 4% in premarket trading on Wednesday, November 11, as investors bought the dip after a two-day sell-off that wiped roughly $480 billion from the chipmaker's market value. Shares rose to $175.45 at 6:49 a.m. ET, up 3.88%, after closing Tuesday at $168.89, down $9.78, or 5.47%.

The rebound came alongside gains in US stock futures, with Nasdaq 100 futures rising 1.67%, S&P 500 futures gaining 0.74% and Dow futures edging up 0.03%.

Investors are returning to AI stocks even as Nvidia faces an investigation involving CEO Jensen Huang, just six days before its November 17 earnings report.

Why is Nvidia stock rising today after a $480 billion market value crash?

Nvidia's rebound comes after two difficult trading sessions. Shares fell 4.3% on Monday and another 5.47% on Tuesday as investors reacted to reports about Huang's relationship with a woman suspected by US intelligence of having links to Chinese intelligence.

The stock closed Monday at $178.67 before falling to $168.89 on Tuesday. Wednesday's premarket recovery has helped Nvidia regain part of those losses, although shares remain below their level before the controversy intensified.

The recovery is also part of a broader rally in AI stocks. CoreWeave shares gained more than 10% in premarket trading after its quarterly results helped ease concerns about AI infrastructure spending. Micron and Marvell also rose nearly 7%.

Nvidia faces Jensen Huang investigation as board hires outside law firm

Nvidia confirmed on Tuesday that its independent directors had hired Wachtell, Lipton, Rosen & Katz to investigate whether company secrets or US national security had been compromised.

The investigation will be led by former acting US Attorney Joon H. Kim.

The company had already announced an independent review on Sunday. Nvidia's board said it had no reason to believe that company secrets or national security had been compromised. It also expressed confidence in Huang and his leadership team.

The allegations remain unproven, and China has denied claims of an espionage operation.

Huang returned to Nvidia's office on Monday and continued holding meetings on Tuesday, according to CNBC. His return comes as investors assess whether the controversy could affect Nvidia's operations or leadership.

Bank of America warns Nvidia could face three different outcomes

Bank of America outlined three possible scenarios for Nvidia in a research note on Tuesday.

The first involves a contained investigation with no major disruption to leadership. Under this outcome, investor attention could return to Nvidia's earnings and AI chip demand.

The second involves prolonged uncertainty that puts pressure on the company's valuation ahead of its quarterly results.

The third carries greater financial risks. Bank of America analyst Vivek Arya warned that adverse findings, leadership changes or tighter restrictions could require investors to reassess Nvidia's earnings outlook.

Morgan Stanley removes Nvidia stock from top picks after 25% decline

Morgan Stanley removed Nvidia from its top stock picks on Wednesday after shares dropped more than 25% since the bank added the company to its list on October 2.

The bank's analysts said Huang's leadership remains crucial to Nvidia's strategic direction.

The decision adds to concerns about how much Nvidia's market valuation depends on its chief executive.

Zacks Chief Equity Strategist John Blank also warned that investors were concerned about possible additional US restrictions and further developments in the investigation.

Speaking to CNBC, Blank said the situation was negative for Nvidia, Huang and the broader AI trade.

Nvidia earnings on November 17: Can NVDA stock sustain its recovery?

Nvidia's next quarterly earnings report is scheduled for November 17, giving investors another major event to watch.

The market will focus on revenue growth, AI chip demand, profit margins and the company's guidance for the coming quarter.