'Massive shoes to fill': Wall Street sours on Nvidia stock after Jensen Huang's exit

Resumen detallado

As the market digested the unfolding drama at Nvidia, at least 10 analysts downgraded their Buy rating on the stock to Hold.

Wall Street analysts have had a change of heart on Nvidia (NVDA) stock following CEO Jensen Huang's abrupt exit on the heels of extramarital affairs, including one with a suspected spy and two employees.

As the market digested the unfolding drama, at least 10 analysts downgraded their Buy rating on the stock to Hold.

"The uncertainty proved too much for us; we moved to the sidelines on the stock," wrote Bernstein's Stacy Rasgon and his team on Thursday. "Nothing would give us more pleasure than being able to revisit the story at some point, but we are having a hard time advocating stepping in here."

The analyst, who slapped a Market Perform rating on the stock with a $200 price target, called into question the ability of any new CEO to truly fill Jensen's shoes "given how tightly he managed the direction of the business and its relationships with customers, suppliers, employees, and the broader industry ecosystem."

Until the board announced Huang's resignation, Wall Street had long grappled with Nvidia's one-man risk: a larger-than-life CEO whose role had come to seem irreplaceable to the company and the broader AI market.

"How can you have the world's most valuable company and no kind of succession plan, not even anyone being groomed with 60 people reporting to Jensen?" former Medtronic CEO Bill George told Yahoo Finance on Friday.

Downgrades on Wall Street cited uncertainty about the leadership change and its impact on the broader AI ecosystem.

"Huang's role as the 'face of AI' cannot be overstated," wrote Oppenheimer's Rich Schafer, downgrading the stock to a Hold as media reports of a second affair surfaced on Wednesday night. "We see massive shoes to fill and no obvious successor," he added.

Yorkville's Dan Ives, however, maintained an Outperform rating on the stock with a lowered price target of $225, writing that "we are not throwing in the white towel" on Nvidia.

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