NEW YORK - HSBC downgraded Nvidia from Buy to Hold on Nov. 13 and slashed its price target to $170 from $365, citing CEO succession uncertainty and export risks. Nvidia shares dropped more than 4% following the downgrade before closing Friday at $162.85, down 2.01%, ending a week in which the stock lost 12.75%.
What happened?
HSBC analyst Frank Lee warned in a client note that Nvidia's stock is likely to struggle until the board names a permanent successor to co-founder Jensen Huang, who resigned on Nov. 11 with Chief Financial Officer Colette Kress stepping in as interim chief. "HSBC downgraded Nvidia to hold from buy on Friday, Nov. 13, and cut its price target to $170 from $365, saying the stock is likely to struggle until the company names a permanent successor to Jensen Huang, CNBC reported," MLQ.ai wrote.
Why does it matter?
Beyond leadership turmoil, HSBC flagged potential export curbs affecting the 11% of total revenue Nvidia generated outside the United States and Taiwan over the past six quarters. "Our sensitivity implies that if NVIDIA loses 11% of FY28e revenue, its EPS downside could be 13% compared with our base case EPS of USD15.65," Lee wrote, noting a bear-case EPS of $13.57 would sit 14% below consensus estimates of $15.77. Other Wall Street banks remain divided, as Wells Fargo maintained an overweight rating and a $300 price target.
What comes next?
Nvidia is scheduled to report fiscal third-quarter earnings after the market closes on Tuesday, Nov. 17, marking its first quarterly release under interim CEO Kress. Investors will scrutinize forward guidance and any board timeline for naming a permanent chief executive.
