"From $500 to $200"... Wall Street Cuts Price Target Amid Jensen Huang Affair Scandal

[Financial News] As concerns grow over NVIDIA CEO Jensen Huang's affair scandal and U.S. restrictions on AI semiconductor exports, Wall Street analysts have begun downgrading their investment ratings on NVIDIA. U.S. investment firm Baird lowered its rating on NVIDIA to “Neutral” and sharply cut its price target from $500 to $200.
According to an 11th (local time) report by U.S. financial news outlet MarketWatch, Baird analyst Tristan Gerra identified restrictions on AI semiconductor exports to China as a key risk for NVIDIA.
He estimated that if exports to China were halted, NVIDIA might have to write down the book value of the affected semiconductors by as much as $5 billion. Last spring, NVIDIA also recorded an impairment loss of a similar size after the Trump administration banned sales of lower-performance AI semiconductors to China.
Analyst Gerra said, “We are lowering our rating to Neutral in light of U.S. government actions and investigation findings, their impact on revenue, and CEO Huang’s future at the company.” He added, “Even if U.S. government restrictions reduce data-center demand in Southeast Asia, much of that can be offset by U.S. demand. But if this coincides with a decline in investment demand from U.S. companies, the impact on revenue could be concentrated.”
Morgan Stanley also removed NVIDIA from its list of top picks. Morgan Stanley analyst Joseph Moore had named NVIDIA a top pick on the 2nd of last month, but withdrew that designation just over a month later.
Analyst Moore cited NVIDIA’s recent share-price drop of at least 25%. However, he maintained his existing “Overweight” rating and $300 price target. He expected uncertainty to persist for the time being, given CEO Huang’s significant role in NVIDIA’s business strategy.
However, he forecast that the impact on overall revenue would be limited, as investment in AI infrastructure continues and semiconductor demand exceeds supply.
U.S. investment news outlet The Motley Fool said that NVIDIA’s future earnings and the findings of the investigation into allegations surrounding CEO Huang could affect investment decisions.
The Motley Fool said, “If NVIDIA’s strong earnings momentum continues and the allegations against CEO Huang are not substantiated, the current share price may appear undervalued,” adding, “If earnings estimates are revised downward, Baird’s judgment will be proven wise.”
NVIDIA shares rebounded more than 4% to $175.85 around noon on the 11th (local time). However, they reportedly recorded their steepest decline since September 2022 over the preceding five trading sessions.


[email protected] Han Seung-gon Reporter