Analysts cut their TPs on Nvidia. The chipmaker could lose up to 30% if Huang falls.
Even analysts who have cut their valuations still see at least 40% upside for the stock
Analysts have begun cutting their targets on Nvidia stock amid the scandal around Jensen Huang / Photo: jamesonwu1972 / Shutterstock
Several investment banks have cut their target prices for Nvidia stock over the last two days amid an internal investigation into CEO Jensen Huang and his ties to a woman suspected of working for Chinese intelligence. Tech bull Dan Ives has warned that Nvidia could lose up to 30% of its value if Huang steps down. Nvidia shares are down more than 5% in Tuesday trading as of this writing.
Details
Mizuho made the deepest cut. The Japanese investment bank lowered its target price by 20%, to $250 per share from $315 per share, Investing.com reports. That still implies 40% upside from the last close.
President Capital made the second-largest cut, lowering its TP on Monday to $295 per share from $330 per share. That implies 65.7% upside from Monday’s close.
Citigroup on Tuesday cut its TP to $285 per share from $315 per share, implying 60% upside. The move followed Citi’s downgrade of U.S. equities and of global and European tech stocks to “neutral” amid deteriorating sentiment around AI.
Wells Fargo rounded out the list with the smallest cut in percentage terms. It lowered its TP to $300 per share from $315 per share and kept its “buy” rating. The new valuation implies 69% upside. Its analysts cited key-person risk tied to Nvidia’s reliance on Huang as one factor weighing on the stock.
Bernstein on Monday reiterated its “buy” rating at a TP of $400 per share, more than double Monday’s closing price.
RBC also reiterated its “buy” rating at a TP of $330 per share on Monday, implying 85% upside.
What other analysts say
Nvidia, once the world’s most valuable company by market capitalization, could take a major hit to its valuation if the embattled CEO is forced out, Yahoo Finance reports.
“We believe if Jensen was removed as CEO, Nvidia is worth a lot less (25%-30%) as a company/stock,” said Dan Ives, a Yorkville Ives partner and veteran tech analyst. Huang’s removal would change the company’s direction and radically reshape competition in AI chips in the U.S. and globally, particularly in China, he added.
“Jensen is the core DNA of Nvidia and its AI success and ambitions are heavily tied to him staying on as CEO,” Ives reckons. He said no one else on the management team could step seamlessly into the CEO role. He concluded that the lack of a clear replacement “speaks to the key man risk now with Nvidia that investors will factor this dynamic to the stock.”
Of the 73 analysts tracked by MarketWatch, 69 are bullish on Nvidia stock, with 62 “buy” and seven “overweight” ratings. Three rate it “hold,” up from two a month ago. Only one rates it “sell.”
