Summary

  • Baird said it cut Nvidia’s price target from $500 to $200, citing the risks of an H200 AI chip export ban and a slowdown in data-center investment.
  • Nvidia shares have fallen 30.5% from their peak, pushing the stock to below 12 times forward earnings and to its cheapest valuation since 2002 on a relative basis.
  • Even so, 78 of 82 Wall Street analysts still rate the stock a buy and assign an average price target of $320, while on Fidelity’s retail platform, buy orders ran at five times sell orders.

Forecast Trend Report by Period

“Is This the Moment?” Nvidia Slides After Jensen Huang’s Exit, Drawing Retail Dip Buyers


Morgan Stanley Removes Nvidia From Top Picks; Baird Cuts Price Target

Some Investors Still Say Nvidia Will Rebound

Are Korean Retail Investors Buying the Dip?

The fallout from former Nvidia Chief Executive Officer Jensen Huang’s affair scandal is influencing Wall Street investment calls. Morgan Stanley and other firms have lowered their views, and the stock has fallen more than 30% from its peak. Still, some Korean investors argue this may be the last chance to buy Nvidia cheaply, citing the company’s intact technological edge and continued growth prospects in AI semiconductors.

Nvidia Price Target Cut to $200 From $500

According to the financial investment industry on Nov. 13, Baird analyst Tristan Gerra lowered his investment rating on Nvidia. He cited a U.S. government investigation and congressional reporting tied to Huang, risks to China-related revenue, and uncertainty over Huang’s future.

Gerra identified a renewed ban on exports of H200 artificial intelligence chips to China as one of the biggest risks facing Nvidia. If that happens, Nvidia may have to write down as much as $5 billion in book value tied to those chips. The company took a similar-sized impairment last spring after the Trump administration blocked sales of downgraded AI chips to China.

Gerra also pointed to next year’s AI data-center spending as a key variable. Supply constraints for some components are delaying expansion plans, while demand itself could also weaken. If that scenario materializes, annual growth in AI spending by large cloud companies could fall below 40%.

He said concerns over data-center investment are already partly reflected in Nvidia’s share price. Even so, the stock will probably remain rangebound until multiple uncertainties are resolved. He cut his price target on Nvidia to $200 from $500.

Morgan Stanley also removed Nvidia from its top-pick list. Analyst Joseph Moore said the stock had fallen more than 25% since he named it his most preferred stock on Nov. 2, triggering the firm’s internal stop-loss rule. He maintained his overweight rating.

Moore said Nvidia faces considerable near-term uncertainty because Huang’s leadership had been central to the company’s strategic direction. The Motley Fool, an investment-focused media outlet, said Nvidia’s current share price could later appear undervalued if its earnings momentum remains strong.

Is the Nvidia Bottom Call Gaining Traction?

After Huang’s abrupt resignation, Nvidia shares fell 4.3% to close at $166.19 in New York trading on Nov. 12. The stock dropped as low as $148.80 intraday, down 14.3% from the previous close. Shares opened at $151 and at one point hit a 52-week low. As the selloff deepened, Nvidia’s market value shrank to $3.593 trillion during the session. Based on the previous day’s close, the decline came to $602 billion. At one point, it also ceded the No. 2 spot in market capitalization to Microsoft.

The stock’s decline has been pronounced since Huang stepped down. Compared with Nov. 6, just before he acknowledged the affair, Nvidia shares are down 11.0% and its market value has fallen by about $494 billion. Compared with the record closing high of $239.24 on Oct. 6, the stock has dropped 30.5%. Over that period, Nvidia has lost about $1.764 trillion in market value. The decline has pushed its 12-month forward price-to-earnings ratio below 12, the lowest level since 2013. Relative to the S&P 500, Nvidia is now trading at its cheapest valuation since 2002.

Nvidia shares had already been under pressure before the controversy erupted. Investors were increasingly questioning whether the huge capital spending going into AI infrastructure would translate into actual profits. Concerns following the U.S. midterm election result also hurt sentiment, amid bets that data-center construction could slow.

On earnings forecasts alone, Wall Street remains upbeat. Brokerages expect Nvidia’s third-quarter revenue and fiscal 2027 revenue and profit to increase by more than 90%. That growth outlook, combined with the lower share price, is supporting the investment case. According to data compiled by Bloomberg, 78 of the 82 analysts covering Nvidia rate the stock a buy. Their average price target is $320, implying upside of more than 90% over the next 12 months from current levels.

Retail investors are also lending support to the view that Nvidia may have bottomed. On Fidelity’s retail trading platform, buy orders for Nvidia after Huang’s resignation ran at five times sell orders. That suggests investors rushed in, viewing the sharp decline as a buying opportunity.

One Korean investor in overseas stocks said Nvidia’s current share price reflects valuation derating tied more to “Jensen Huang risk” than to any damage to fundamentals. Nvidia’s CUDA software ecosystem and technological barriers to entry in the AI accelerator market remain solid, the investor said, and the company is close to irreplaceable. With the bad news largely priced in, now is a range to build positions through staggered buying.

Another investor said Nvidia’s current share price looks extremely attractive when viewed against levels from the first half of this year. The forward price-to-earnings ratio has fallen sharply from historical levels, and uncertainty over Huang’s future has now been resolved. If earnings guidance is maintained, the current pullback will likely amount to no more than a digestion phase within a medium- to long-term uptrend.

Kang Kyung-ju, Hankyung.com reporter [email protected]

Korea Economic Daily