Three brokers stepping back in two days removes an important source of support for Nvidia, just as the stock heads into results. Bernstein’s method matters for the wider AI trade. By cutting the multiple rather than earnings, it frames the problem as risk specific to Nvidia, not a slowdown in AI demand. That supports the rotation seen after hours, with AMD, Broadcom and Alphabet benefiting . For the indexes, Nvidia falling below a $4 trillion valuation would weigh heavily on the S&P 500 and Nasdaq. Futures and the Asian chip supply chain are likely to stay sensitive to any board announcement before November 17.
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Bernstein still believes in Nvidia’s chips, just not in paying 25 times earnings while nobody knows who will be running the company.
Summary:
Bernstein analyst Stacy Rasgon downgraded Nvidia to Market Perform from Outperform and cut his target to $200 from $400
He said leadership uncertainty, not weak chip sales, drove the move, and that Bernstein may not yet fully understand how deep the issue goes
Rasgon kept earnings forecasts unchanged, saying AI demand remains very strong, but halved the valuation multiple to about 12.7x fiscal 2028 earnings
Morgan Stanley stepped back on November 11, and Baird cut Nvidia to Neutral with a $200 target, down from $500
Nvidia fell roughly 8% after hours to around $160, on track to drop below a $4 trillion valuation
Bernstein has downgraded Nvidia to Market Perform from Outperform and halved its price target to $200 from $400. That makes it the third major brokerage in two days to step back from the stock as uncertainty over chief executive Jensen Huang’s future deepens.
Analyst Stacy Rasgon was clear that the move had nothing to do with weak chip sales. In a client note and a later CNBC appearance, he said the downgrade was driven by leadership uncertainty, after reports that Nvidia’s board is preparing to remove Huang, who has acknowledged an extramarital affair. Rasgon wrote that Bernstein’s instinct is that it may not yet fully understand how deep the issue goes, and that it has chosen to step back to the sidelines for now. He also told CNBC that replacing Huang would be very difficult, and that it is not obvious who could succeed him.
The way Bernstein cut its target is the most telling part of the call. Rasgon kept his earnings forecasts unchanged, saying underlying AI demand remains very strong. Instead, he halved the valuation multiple he is willing to pay. The new $200 target equals roughly 12.7 times consensus earnings of about $15.75 a share for the fiscal year ending January 2028, down from about 25.4 times at the old $400 target. In Bernstein’s view, the business has not changed. What has changed is the price investors should pay for its future earnings, because of the risk around who will run it.
Bernstein is not alone. Morgan Stanley stepped back on November 11. Baird downgraded Nvidia to Neutral from Outperform and also cut its target to $200, from $500, citing uncertainty over Huang’s future as well as concerns about supply and visibility on 2027 spending.
Nvidia shares fell roughly 8% in after-hours trading to around $160, putting the company on track to slip below a $4 trillion market value. The drop pulled down AI infrastructure names such as CoreWeave and Super Micro Computer.
Even at $200, Bernstein’s target sits above where the shares are trading after hours, which suggests the bank sees the risk as uncertainty rather than collapse. The next markers are any board decision on Huang and Nvidia’s third-quarter results on November 17, when management will face questions on both demand and leadership.
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Not everyone is down on Huang:
This article was written by Eamonn Sheridan at investinglive.com.
