HSBC Cuts Nvidia to Hold, Slashes Target 54% to $170

HSBC cut its Nvidia (NASDAQ:NVDA) price target by roughly 54% on Friday, from about $370 to $170, and downgraded the stock to Hold from Buy. Nvidia closed Friday at $162.85, so the new target implies only about 4.4% upside. The average Wall Street target of $279.63 implies roughly 72% upside, and analysts disagree sharply over which figure is more realistic.

HSBC analyst Frank Lee delivered the cut. Reports put his prior target at either $365 or $375. The downgrade landed days after a leadership rupture at the top of the company: Jensen Huang resigned on Thursday, and CFO Colette Kress became interim CEO.

The business Lee downgraded is still expanding quickly. Nvidia reported $96.22 billion in revenue last quarter, up 105.8% year over year. Management said customer demand runs well ahead of what its supply chain can deliver.

What drives HSBC's bear case?

Lee's first argument is leadership. He expects the stock to stay under pressure until Nvidia sets out a formal succession plan and a permanent CEO demonstrates execution.

His second argument is exports. About 11% of Nvidia's revenue over the past six quarters came from countries outside the U.S. and Taiwan that could face tighter chip export rules. That group likely overlaps with the sovereign and regional cloud buyers in Nvidia's ACIE segment, which posted $40 billion in revenue last quarter, up 138% year over year.

Losing that revenue would cut fiscal 2028 EPS by 13% in his bear case, from $15.65 to $13.57. That gap is small next to the slide in the shares. At Friday's close, Nvidia trades at about 10 times HSBC's base-case EPS and about 12 times the bank's most pessimistic estimate. Even the downside scenario leaves the stock cheap.

How cheap is Nvidia now?

The stock trades at about 11 times forward earnings, its lowest multiple in 15 years. Shares have fallen 23.78% since October 29.

HSBC's $170 target works out to about 11 times Lee's base-case EPS. Lee is assuming today's discount remains rather than closes. A target this close to the price is a neutral call: he sees limited reward but stops short of telling clients to sell. A low multiple signals value only if estimates hold, and the wave of downgrades suggests many analysts expect forecasts to drift lower before they stabilize.

How deep does the downgrade wave run?

HSBC is one of at least nine Hold-type downgrades since Huang's exit, a list that includes Truist, Bernstein, KeyBanc, Evercore ISI and Oppenheimer. Others trimmed targets but stayed positive:

• Barclays cut to $210 from $275
• DA Davidson cut to $200 from $300
• Wells Fargo kept Overweight with a $300 target

Consensus remains Buy across 61 analysts. One camp sees a lasting reset, while the other sees a temporary leadership discount. A leadership discount can survive strong demand because the next CEO inherits large commitments: Nvidia has committed nearly $50 billion in frontier AI labs and expects lab demand backed by its balance sheet to contribute roughly a quarter of next year's business.

What happens next week?

Selling sped up after the downgrade. Nvidia fell 2.01% Friday to a $3.93 trillion market value and slid to $161.04 after hours. That ended a 12.75% weekly loss — its sixth straight and its worst since a 14.0% drop in April 2025. Shares are down 12.48% this year, while the S&P 500 is up 10.62%. The 52-week low of $148.80 is the next reference point.

The next quarterly report is expected Tuesday after the close. Management guided to $108.0 billion in revenue, plus or minus 2%, and called its roughly 70% fiscal 2028 growth outlook supply-constrained.

Holding that guidance and naming a credible permanent CEO would undercut HSBC's view. More downgrades and estimate cuts would support it.

The valuation case looks strong here. The price already reflects something close to HSBC's export bear case at about 11 times forward earnings, while demand still tops supply. The risk is a long stretch without a permanent CEO, combined with tighter export rules and the financing commitments to AI labs. Guarantee obligations for cloud and data center partners stand at $108.5 billion, which a new CEO will have to manage.

For investors seeking AI exposure without the succession question, Broadcom (NASDAQ:AVGO) is a comparison point: AI semiconductor revenue rose 221% to $16.70 billion, with next-quarter guidance of $21.70 billion. For Nvidia itself, the gap between a $170 target and a $279.63 average suggests more upside than HSBC allows — as long as Tuesday's guidance confirms demand is intact.