The fundamentals of Nvidia (NVDA.US) are still there, but there may be more problems! Bernstein joined the downgrade wave, and the target price was cut to $200
The Zhitong Finance App learned that investment bank Bernstein downgraded its stock rating of Nvidia (NVDA.US) from “outperforming the market” to “equal the market”, while the target price was cut directly from $400 to $200 in a newly released research report.
Bernstein pointed out that Nvidia CEO (CEO) Wong In-hoon sent an internal letter to all employees on November 8 admitting being unfaithful to his wife and apologizing to the family, employees, board of directors, partners and shareholders. Nvidia's board of directors announced on the same day that a special committee composed of independent directors has been set up to launch an independent investigation with the assistance of external independent legal advisers to find out whether Hwang In-hoon has become the target of foreign intelligence agencies' actions.
However, just three days later, it was revealed that Hwang In-hoon had a second extramarital relationship. The woman was Nvidia's vice president who reported her work directly to her. Meanwhile, according to media reports, citing people familiar with the matter, Nvidia's board of directors is intensively preparing to dismiss Wong In-hoon. The board of directors will be held on November 12 as soon as possible to decide where to stay, and has cooperated with external headhunters to find a successor and consider appointing an interim CEO to transition first.
After the first reports of the affair appeared, Bernstein once pointed out that whether Hwang In-hoon can continue to be Nvidia's helm is the biggest risk these accusations pose to Nvidia's stock. The agency believed at the time that it was not in anyone's best interest to leave office, whether for shareholders, the board of directors, or the US government. But as the latest news surfaced, the agency believes it seems impossible for Nvidia's board of directors to keep him in this position. And if it turns out that Nvidia's board of directors has not removed him at this time, it will obviously pose further risks, because judging from the current situation, it seems likely that more allegations will come to light.
Bernstein said that on the positive side, despite the problems faced by the leadership, Nvidia's business fundamentals are clearly still stable, and the operating data is still extremely large (and is likely to continue to grow). The agency believes that Nvidia is unlikely to encounter major problems with business operations during the search for new leadership. Of course, Nvidia's stock price is now almost ridiculous (and it's getting cheaper right now); apparently, the market is counting a lot of negative news into the stock price.
But on the other hand, Bernstein said it is difficult to recommend investors to buy in large quantities at current prices, because there is no doubt that there will be more problems in the future. These issues may either come from within the company or involve business-related media headlines, new government investigations, etc. Additionally, this new variable who will take charge of the company, and other issues that may or may not be discovered by a successor will further increase uncertainty. The agency couldn't even begin to guess who Nvidia would actually find to replace Hwang In-hoon.
Regarding the supply chain itself, Bernstein is also thinking about where Nvidia's many investments, various support arrangements, and remaining guarantees in this field will go. On the other hand, some of Nvidia's competitors have performed strongly recently due to related news, and it is expected that they may continue to receive market support in the future.
Bernstein admits that when making this rating adjustment, the agency experienced quite a fierce ideological struggle, and was also able to understand the logic of buying on dips. However, intuition suggests that it is probably not yet fully known how serious the problems that may be revealed behind this storm are, so they would rather stay in the field for a while. As a result, the agency downgraded Nvidia's stock rating to “the same level as the market” and lowered the target price from $400 to $200 (corresponding to a forward price-earnings ratio of about 11 times, lower than the previous 21 times; this valuation multiplier was applied to the average value of the agency's earnings forecast of $19.04 per share for fiscal year 2028 and fiscal year 2029, and the profit forecast remained unchanged). The agency added that despite the enormous opportunities in the data center market, the difficulties faced by the leadership and the shadow of investigations that may continue for some time may continue to put pressure on Nvidia's stock price.
Bernstein's views are similar to those of Yorkville Ives partner Dan Ives, a well-known tech stock analyst. Dan Ives said that if Nvidia doesn't have Hwang In-hoon, the fair value of the stock will drop by about 25% to $225, while if Hwang In-hoon continues to head the company, the fair value of the stock is expected to drop to $300.
Analysts, including Dan Ives, wrote in a report: “The reality is that in the eyes of the public, customers, and the tech community, that Hwang In-hoon of the past no longer exists. As more news continues to come to light, the board of directors is quickly becoming aware that the situation is getting worse day by day.”
Dan Ives expressed Nvidia's potential leadership changes more directly in a social platform post: “In our opinion, Hwang In-hoon's days at Nvidia may be numbered, and this is a very clear sign. We expect that in the next 48 hours, there will be many changes in the state of affairs. Hwang In-hoon has caused a reputation stain on himself and Nvidia, and now he has created an intricate network of relationships. Without Hwang In-hoon, Nvidia would be worth $225.”
Analysts added that the key issues that need to be addressed now include: Who is likely to succeed Hwang In-hoon? What would an interim strategic road map look like? Will there be any changes to the board of directors? How will Nvidia respond to government investigations? And how will Nvidia's GPU chips enter the Chinese market? However, they still stated, “Nvidia itself and its leading GPU technology will continue to evolve, and this will not change the firm position the company has already established in the AI revolutionary chip race.”
In addition to Bernstein, investment bank Baird also downgraded Nvidia's stock rating from “outperforming the market” to “neutral,” and lowered its target price by 60% from $500 to $200. The agency said it will take a more cautious stance until the government investigation and possible measures and potential financial impacts after the National Assembly briefing are clear.
More major Wall Street banks have also lowered their target prices for Nvidia. In the latest research report released on November 12, Citi lowered Nvidia's target price from $285 to $225, a drop of 21%, but it still maintains a “buy” rating.
Citi said bluntly that if Hwang In-hoon were forced to leave, it would mark the end of an era. During his time in charge, Nvidia became the dominant force in AI infrastructure, the most direct beneficiary of the global AI spending cycle, and one of the companies with the highest market capitalization in the world. This influence does not come from positions, but rather from strategic judgments, product vision, customer relationships, and investor confidence. Because of this, Citi believes that the transition of leadership will continue to put pressure on stock prices.
In the Citi framework, the key is not only “whether someone will be replaced”, but also “how long the uncertainty will last.” From board review and external candidate search to formal handover, every step lengthens the suppression period. For a company that relies on a multi-year roadmap to target customers, the fuzzy period itself is a cost. The impact is more realistic on the client side. The procurement decisions of hyperscale cloud vendors are usually tied to a multi-year computing power roadmap, and personnel changes will cause some orders to be returned from “promises” to “observation.” Such delays are not immediately reflected in financial reports, but are often first reflected in valuation multiples.
Additionally, Wells Fargo lowered Nvidia's price target from $315 to $300. Mizuho Securities lowered Nvidia's target price from $315 to $250, but it still believes that the current Nvidia stock price is “ridiculously cheap” and is a good buying opportunity. Both Morgan Stanley and Bank of America removed Nvidia from their top list but maintained a “buy” rating.
At least judging from now on, Wall Street's position on Nvidia is not so bad that they are calling for “sell.” According to LSEG data, 59 out of 64 brokerage firms still give “buys” or “strong buys,” with a median target price of $314.