Nvidia shares rose more than 4% in premarket trading on Wednesday, their first meaningful bounce since the Jensen Huang scandal broke. The catalyst was not Nvidia itself but CoreWeave, the AI-focused cloud provider in which Nvidia holds a $2 billion stake.

The rally interrupts a brutal run. Nvidia stock had fallen 15.61% over the previous five days and 26.34% for the month, after news that CEO Jensen Huang had an extramarital affair with an alleged Chinese spy. The story has dogged the chipmaker for days and drawn a board investigation.

CoreWeave supplied the counterweight. On Tuesday, the company reported third-quarter earnings that beat Wall Street's revenue estimates and raised its full-year guidance.

What did CoreWeave report?

Revenue climbed to $3.66 billion, ahead of the $3.55 billion consensus estimate cited by CNBC. That figure marked 168% growth year-over-year. CoreWeave also lifted its 2026 full-year revenue outlook from $13 billion to $13.3 billion.

Investors rewarded the numbers immediately: CoreWeave shares (Nasdaq: CRWV) jumped more than 15% in Wednesday premarket trading.

The results mark a turnaround for a stock that had been under siege. Ahead of the earnings report, CoreWeave shares were down 40.63% over the past month, pressured by broader fears of AI overspending. So-called neocloud companies — cloud providers built specifically for AI workloads — have absorbed some of the hardest hits in the recent selloff.

Why does CoreWeave's success help Nvidia?

The mechanics run through two channels, and both matter for Nvidia holders.

First, sentiment. When a major AI company posts strong numbers, it eases investor concerns that the AI bubble is about to burst, lifting AI stocks across the board. Nvidia, as the sector's bellwether, captures that relief trade directly.

Second, ownership. In January, Nvidia invested $2 billion in CoreWeave, becoming the company's second-largest shareholder. CoreWeave's success now feeds straight into Nvidia's own standing — a 15% move in the neocloud's share price has a measurable effect on the value of Nvidia's position.

For practitioners, the implication is straightforward: Nvidia's stock is no longer trading purely on the Huang scandal. It has repriced around fundamentals in its AI infrastructure portfolio, and CoreWeave has become a live proxy for that exposure.

What will happen at Nvidia?

The answer remains open. Betting markets predict Huang will not leave the CEO role — at least not any time soon, according to the Polymarket contract tracking his departure by December 31. The company's board of directors is currently investigating the affair and any impact it may have had on the company.

Wall Street, meanwhile, has started to hedge its positions. Baird downgraded Nvidia stock from "Outperform" to "Neutral" this week, citing concerns that include AI capital expenditure. Morgan Stanley also dropped Nvidia from its list of top picks, CNBC reports.

The picture for investors is a tug-of-war between two forces. On one side: the Huang affair, an active board probe, a Baird downgrade and a Morgan Stanley demotion. On the other: a $2 billion stake in a neocloud that just grew revenue 168% year-over-year and raised its guidance.

Wednesday's premarket gain suggests that, for now, the second force is winning. Whether it holds depends on what the board investigation surfaces — and on whether CoreWeave's beat proves a turning point for AI spending fears or a single quarter's reprieve.