Retail investors have been piling into Nvidia (NASDAQ: NVDA) shares this week. It’s easy to see why – Nvidia’s share price is down heavily after Jensen Huang’s exit and the stock looks cheap.
However, before you follow the crowd and rush to buy, be aware that Wall Street analysts are adjusting their price targets for the stock. All of a sudden, sell-side sentiment towards the AI powerhouse is far less bullish.
$500 to $200
One of the biggest price target adjustments in recent days has come from investment banking and capital markets specialist Baird. It has slashed its target from $500 to $200.
This move came on 11 November, the day before Huang’s resignation. Baird’s analysts cited a cloud of policy and leadership uncertainty around the company as a key driver of the price target reduction.
$400 to $200
Another massive downgrade has come from Bernstein SocGen. Its analyst Stacy Rasgon – who is regarded as a leading chip expert on Wall Street – has just taken his Nvidia target down to $200 from $400.
Rasgon reckons the company shouldn’t have major issues operating during a search for new leadership. However, he says there’s uncertainty around who will take over… and what else may be uncovered.
$330 to $230
At RBC Capital, analysts have taken their Nvidia price target down to $230 from $330. They see limited impact to near-term business fundamentals, noting demand’s currently outpacing supply by around 50%.
However, they’ve said that the longer-term impact from Huang’s exit shouldn’t be underestated given his singular vision, execution track record, and technology acumen. These factors were central to Nvidia’s dominance.
$315 to $205
At Stifel, analysts have lowered their price target to $205 from $315. That’s around 13 times fiscal 2028 estimated earnings per share of $15.65.
Previously, the analysts had the stock at 20 times 2028 earnings. However, due to uncertainty over who will lead the company, the timeline, retention of senior leadership, and channel and export-compliance posture, they see the lower earnings multiple as more appropriate.
$315 to $185
Finally, Melius has cut Nvidia from $315 to $185. Its analyst Ben Reitzes has also downgraded the stock from Buy to Hold.
Before the recent mess, Reitzes was very bullish on the name. However, the leader’s exit has changed things and Reitzes believes potential actions, such as pre-announcing a strong quarter, reiterating fiscal 2028 guidance for 70% growth, increasing the buyback, or announcing a management continuity plan involving the CFO, won’t address long-term issues.
The takeaway
From these new price targets, we can see that Wall Street analysts are now far less bullish on Nvidia shares than were a few weeks ago. Clearly, the uncertainty around leadership has knocked sentiment.
That said, all of the price targets above are higher than the current share price. So analysts don’t see the stock falling further given its low valuation today.
To my mind, the main takeaway is that investors should temper their expectations. Ultimately, the outlook for Nvidia’s changed. The growth stock could still be worth considering. However, don’t expect it to fly to $300 in the next 12 months.
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Edward Sheldon owns shares in Nvidia.
This story originally appeared on Motley Fool
