Nvidia supplier Victory Giant hit by CEO scandal amid AI stock rout

Victory Giant Technology’s stock price has shown an evident fluctuation over the last two days. This comes amid a scandal surrounding its CEO, which made it to the market and led to a worldwide sell-off, hitting the semiconductor industry. 

The company’s stock price dropped by 6 percent on Monday; however, it jumped by 8.7 percent on Tuesday and closed at HK$361.2. This suggests that sentiment toward AI stocks is highly responsive to macroeconomic events and events related to the company itself.

Social media claims led to a quick sell-off in VGT shares

VGT’s stock sell-off started on June 6 when one Douyin user made some accusations against the company chairman, Chen Tao, and presented video evidence, according to the BigGo Finance report. The news soon spread quickly through numerous investor chat groups ahead of trading sessions on June 8.

The stock price of VGT in mainland China fell to 6.06%, or 318.33 yuan, while in the Hong Kong market, its stock opened with a decline of 7.65% at HK$336. There was an increase in the trading volume of VGT stocks in Hong Kong to HK$1.28 billion, indicating a potential case of forced sales.

It was observed that the timing of the announcement had been instrumental in pushing VGT down as a result of weak global semiconductor stock prices amid valuation issues in the wake of AI capex worries.

VGT moves quickly to contain fallout

The company acted quickly to control the damages, stating that the allegations in no way affect the normal course of their daily business operations and management structure. They added that the allegations made online had nothing to do with their manufacturing process, operations, or control procedures.

As per the National Business Daily, the firm stated that it was an issue unrelated to the public materiality that needed to be made known to the public. Company president Zhao Qixiang said that the reports were “not totally accurate” and said police were informed about the incident and knew of the situation, as per protocol.

In their Investor Relations report released on June 7, Victory Giant described its chairman, Chen Tao, as “an acknowledged technical expert in the PCB sector,” per the BigGo Finance report.

Victory Giant occupies a key position in Nvidia’s AI hardware supply chain by manufacturing highly advanced PCBs used in supercomputers, AI accelerators, networking hardware, and data centers.

According to its prospectus, which was issued in relation to the company’s HK listing in 2025, Victory Giant took up a global leadership position by achieving the highest revenue generated during the first half of 2025 from the manufacture of PCBs that are used in AI and HPC. Specifically, the company achieved a market share of 13.8%. In addition, the company highlighted its early mass production of sixth-generation HICs with 24-layer circuits used in AI servers and computer platforms.

Although the firm does not reveal information about revenues generated through sales of products to particular clients, estimates by analysts suggest that between high single-digit and low double digits of Victory Giant’s revenues relate to Nvidia-based AI server demand due to accelerator boards, server backplanes, and networking equipment utilized by hyperscalers and original design manufacturers.

The company’s exposure to spending on AI infrastructure has made it one of the most-watched beneficiaries of the development of AI computational infrastructure. This has contributed to its valuation premium compared to other PCB makers. PCBs and substrates oriented towards AI typically have higher multiples compared to other PCBs since AI-oriented investments are expected to generate greater income growth and visibility in the future.

Compared to other PCB companies operating in the same region, VGT falls within the category of fast-growing firms owing to its specialization in applications involving artificial intelligence servers and advanced HDI technology. According to industry estimates, PCB firms that are exposed to AI technologies generally trade at forward multiples ranging from mid-teens to the low twenties, while the rest trade at higher single-digit to low-teens multiples. Despite recent volatility in the semiconductor industry, VGT is still being valued based primarily on expectations for strong demand for AI technologies.

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