Wall Street Cuts Nvidia Targets as CEO Risk Hits Shares

Priya Raman

How far have Wall Street targets moved?

U.S. investment bank Baird cut Nvidia’s price target by 60% to $200 from $500 on the 11th, lowering the rating to neutral (a hold-like stance) from outperform (an above-benchmark return call). A price target is an analyst estimate of expected share value, not a guaranteed price.

Baird cited the risk of a leadership change, uncertainty surrounding U.S. congressional hearings and government investigations, China export restrictions, and concern about a slowdown in artificial intelligence (AI) data-center investment next year. These factors do not establish that chief executive officer (CEO) Jensen Huang will step down.

Bernstein halved its target to $200 from $400, citing a possible leadership vacuum if Huang leaves. Senior analyst Stacy Rasgon said: “We cannot even begin to guess who could fill Jensen Huang’s shoes.” He argued that China would clearly be the biggest beneficiary if Huang departed.

Aletheia Capital moved the stock to neutral from buy and withdrew its $349 price target. It cited disruption from the investigation into management and funding burdens at AI customers.

Other firms reduced targets while retaining their ratings:

• Mizuho Securities: Target cut 20.6% to $250 from $315.
• Citi: Target cut 9.5% to $285 from $315.
• Morgan Stanley: Overweight (an above-benchmark allocation) retained; $300 target; Nvidia removed from the recommended list.
• Bank of America: Buy (a positive recommendation) retained; $350 target; Nvidia removed from the recommended list.

What do South Korean investors stand to lose?

Nvidia stood at $160.47 at midnight on the 12th, down 7.63% from the regular-session close and 14.02% below its close on the 6th.

The 6th was the last trading day before Huang acknowledged an extramarital affair on the 8th. Shares fell 4.27% on the 9th and 5.47% on the 10th, producing a two-day decline of 9.51%. A 2.87% rebound took the stock to $173.73 in regular trading on the 11th.

After-hours trading (outside regular U.S. hours) then reversed the gain after reports that the board could decide Huang’s position. Those reports did not disclose a board decision.

South Korean retail investors held $13.64 billion, roughly 18 trillion won, in Nvidia shares as of the 10th. The Korea Securities Depository’s SEIBro holdings system placed them second among overseas stock holdings, behind Tesla at $21.69 billion.

Net purchases recorded at settlement (completed trades net of sales) reached $31.62 million on the U.S. trading day of the 6th and $39.87 million on the 9th. Those amounts ranked fourth and third among overseas stocks on their respective days. Together, they reached $71.49 million, or 95.3 billion won.

Some investors bought after the semiconductor-stock slump following the midterm elections, then bought again after Huang’s admission. Those positions now carry the added risk of a possible dismissal, although no board decision has been disclosed.

Can earnings settle the uncertainty?

Nvidia’s earnings are due on the 17th. Operating performance may not answer the governance questions surrounding Huang.

Cho Jae-woon, an analyst at Daishin Securities, said: “Nvidia has beaten earnings expectations for six consecutive quarters, but the strong results have not translated into share price gains. The investigation involving the CEO is a separate matter from earnings, but it could amplify volatility before and after the results.”

His warning concerns volatility, not direction. The 17th report can test operating performance, but it cannot by itself resolve succession, investigation or export-control questions.

Until the board clarifies Huang’s position and the investigations reach defined conclusions, investors face a wider range of outcomes than the revised targets alone indicate.