AI stock Nvidia resumes losing run as brokerages turn bearish; Jensen Huang exit fears, board probe spook investors

Résumé détaillé

Brokerages have cut Nvidia price targets and downgraded the stock amid an investigation into allegations involving CEO Jensen Huang and uncertainty over his future.

Global investment firms have turned increasingly bearish on Nvidia, cutting their price targets for the world's most valuable semiconductor company by market capitalisation as governance concerns and leadership uncertainty mount.

Baird issued a rare downgrade of Nvidia, while Morgan Stanley removed the stock from its Top Pick list on Wednesday, while BofA Global Research also removed Nvidia from its US 1 List, while at least three other brokerages, including Wells Fargo and Citigroup, lowered their price targets earlier this week.

Baird downgraded Nvidia's rating to "neutral", citing limited visibility into 2027 ​data-center spending, potential demand softening after years of breakneck AI investment ⁠and uncertainty over Huang's tenure beyond next year.

Morgan Stanley removed Nvidia from its Top ​Pick list while maintaining its "overweight" rating with an unchanged target price of $300, Reuters reported.

Bernstein on Thursday slashed its price target on Nvidia shares by half, from $400 to $200. Stacy Rasgon, a senior analyst at Bernstein, told CNBC's 'Squawk Box Asia' on Thursday that the allegations involving Huang and a direct report could make it "much tougher for the board to leave him in position," according to the report.

Huang's reported relationship with a Chinese businesswoman, who has been alleged to have links to Beijing's intelligence services, has triggered an internal board investigation, an FBI inquiry, and calls in Washington for him to step down.

The developments have raised fresh questions about Nvidia's dependence on its CEO and the company's China-related chip dealings.

Even before the latest controversy, Nvidia shares were facing pressure as investors increasingly questioned the sustainability of the AI trade and the hundreds of billions of dollars in capital expenditure being committed to building AI infrastructure.

Following a brief recovery in the previous trade, Nvidia shares resumed their losing run on Thursday, falling 7% in post-market trading…

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