INTC, BABA Shares Slide Over Links To Firm Tied To Suspected Chinese Spy

Megaspeed, the former employer of the suspected Chinese spy, lists Intel as a partner.

• Intel declined 3% while Alibaba slid nearly 6%, dropping more than its peers.
• In May, short seller Culper Research alleged that Megaspeed received substantial funding from Alibaba.
• Retail sentiment for INTC shifted to ‘bearish’ from ‘neutral’ while the sentiment for BABA remained ‘bearish.’

Intel (INTC) and Alibaba Group Holding (BABA) shares tumbled in overnight trading ahead of Thursday’s session as investors reviewed their links with the firm tied to the suspected Chinese spy with whom Nvidia (NVDA) CEO Jensen Huang allegedly had an affair.

INTC fell 3%, the largest decline among major chipmakers apart from NVDA, which plunged over 7%, even as peer Advanced Micro Devices (AMD) stock rose. To be sure, Nvidia owns a minority stake in Intel.

BABA was down 5.7%, tracking a 7% drop in the Hong Kong-listed shares. Other major Chinese tech stocks trading in the U.S., Baidu (BIDU) and JD.com (JD), were down by a smaller percentage.

Meanwhile, Reuters reported that Chinese AI companies are reportedly rushing to rent Nvidia-powered computing capacity at data centers outside China, concerned that the Nvidia scandal could spur Washington to tighten restrictions on their remote use of advanced processors.

Those fears added to the pressure on BABA, according to Bloomberg.

Megaspeed Links To Intel, Alibaba

With new updates in the Nvidia saga emerging every few minutes, the lens has shifted to Megaspeed, the Singapore-based data center and AI cloud infrastructure provider and the former employer of alleged spy Alice Hunag.

The firm’s website lists Intel as a partner, alongside Nvidia and Gigabyte. 

In May, short seller Culper Research alleged that Megaspeed and its Malaysian subsidiary Speedmatrix had received substantial funding from Alibaba. Culper said Megaspeed had been “secretly financed by Alibaba via a series of apparent shell companies.” 

The Nvidia Fallout

The New York ​Times reported last month that Huang had a relationship with Alice Huang, whom U.S. authorities investigated and concluded was a Chinese intelligence asset. 

Huang admitted to an affair on Sunday without offering details. Nvidia launched an investigation, and reports speculate that the company’s board is considering removing him as CEO.

Nvidia’s ​board said earlier this week that it has "no reason to believe" U.S. national security or company secrets were compromised. Beijing has denied any involvement in the matter. 

Retail View On INTC, BABA

On Stocktwits, the retail sentiment for INTC shifted to ‘bearish’ from ‘neutral’ while the sentiment for BABA remained ‘bearish.’

NVDA shares slid 7% this week through Wednesday’s close and another 8% in overnight trading after media reports speculated about a second affair involving Huang and the possibility of his ouster.

Still, the retail sentiment for NVDA on Stocktwits climbed even higher in the ‘extremely bullish’ zone as of early Thursday. 

Alibaba is scheduled to report its quarterly results on Nov. 19. “$BABA hopefully a big pump after earnings. God knows we need it,” posted a trader.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<