A Widening Split on Valuation

Nvidia Corp. ($NVDA) faced a wave of analyst downgrades and price-target cuts on Thursday, as Wall Street scrambled to recalibrate the chipmaker's valuation amid reports that the board is considering the removal of CEO Jensen Huang.

Bernstein SocGen Group downgraded the stock to Market Perform from Outperform and slashed its price target to $200 from $400. Oppenheimer downgraded to Perform from Outperform and withdrew its target entirely. William Blair moved to Market Perform from Outperform, and Evercore ISI downgraded to In Line from Outperform with a $186 target.

The extraordinary flurry of revisions underscores a central distinction for investors: analysts remain largely bullish on Nvidia's business but are demanding a lower valuation for its shares as uncertainty mounts. Stifel made that point explicitly, retaining its Buy rating while cutting its target to $205 from $315.

Leadership Risk in Focus

The catalysts are reports that Nvidia's board is weighing Huang's removal following allegations concerning his personal relationships and possible foreign-intelligence concerns. Those allegations and deliberations are reported, not confirmed, and no succession announcement has been made.

Oppenheimer cited reports of a possible CEO departure in its downgrade, while William Blair pointed to leadership uncertainty. The investment issue is key-person risk: analysts see Huang's strategy, customer relationships, and decision-making as unusually important to Nvidia. Bernstein's Stacy Rasgon said replacing him would be "very, very difficult," with no obvious successor.

"We have a constant balance with the banks, which really we consider our partners and not only our binary competitors," said one portfolio manager, speaking generally about governance concerns. "It's much more of a convergence between the two solutions." That quote, while about a different topic, reflects the broader sentiment that investors are seeking clarity.

Earnings Still Strong

The downgrades come despite exceptionally strong reported results. For its fiscal 2027 second quarter ended July 26, Nvidia posted revenue of $96.2 billion, up 106% year over year, with Data Center revenue of $89.0 billion, up 117%. GAAP net income reached $59.7 billion, or $2.46 per diluted share, and free cash flow was $21.3 billion. Data Center represented roughly 92% of revenue.

Management guided third-quarter revenue to $108 billion, plus or minus 2%, with gross margins around 74%, assuming no Data Center compute revenue from China. Results are scheduled for November 17.

Price Target Cuts and Reiterations

Stifel cut its target to $205 from $315, Citi reduced its to $225 from $285, RBC Capital lowered its to $230 from $330, BofA Securities trimmed its to $280 from $350, and Yorkville Ives cut its to $225 from $300. Yorkville Ives also estimated fair value at $225 without Huang versus $300 with him, a conditional assessment.

Not everyone is retreating. Mizuho (NYSE:MFG) reiterated Outperform with a $250 target, UBS (NYSE:UBS) reiterated Buy with a $300 target, Raymond James (NYSE:RJF) maintained Strong Buy with a $515 target, and Piper Sandler (NYSE:PIPR) reiterated Overweight with a $300 target.

Market Fallout

Bloomberg reported that Nvidia shares closed Wednesday at $173.73 and fell as much as 10% in extended trading. If sustained, the decline would push the company's market capitalization below $4 trillion. The pain spread across the AI supply chain: CoreWeave (NASDAQ:CRWV) fell more than 5%, Super Micro Computer (NASDAQ:SMCI) more than 4%, and Intel (NASDAQ:INTC) and Dell (NYSE:DELL) about 3% each in Wednesday's extended session.

The broader context includes China export restrictions, which are already reflected in Nvidia's guidance, and concerns about the pace of AI spending. Baird downgraded the stock on November 11 and cut its target to $200 from $500, citing those factors. Baird estimates hyperscaler AI capital spending could grow around 40% or slightly less in 2027, still substantial but potentially insufficient for earlier expectations. Morgan Stanley (NYSE:MS) removed Nvidia from its Top Pick list after the stock fell more than 25% from its October 2 selection, but retained Overweight and a $300 target.

Nvidia did not immediately respond to a request for comment. The board's next move—and the November 17 earnings report—will determine whether leadership uncertainty remains a temporary valuation discount or becomes an operating problem.