Key Takeaways
- HSBC downgraded NVIDIA to Hold and cut its price target to $170 from $365 on Nov. 13, one of at least nine Hold-type downgrades as Jensen Huang left as CEO.
- HSBC also warns that tighter US export rules could cut NVIDIA’s fiscal 2028 earnings per share 13% below its base case.
- Analysts’ earnings estimates haven’t fallen with the stock, and its forward P/E sits at a five-year low.
- HSBC’s $170 implies an even lower multiple a year out, which looks too harsh if estimates hold, and the Nov. 17 report is the next test.
NVIDIA (NVDA) is about 32% below its Oct. 6 record close, and the downgrades keep coming. On Nov. 13, HSBC analyst Frank Lee cut the stock to Hold from Buy and slashed his target to $170 from $365, about 5% above Friday afternoon’s price of around $162.
Truist, Craig-Hallum, Bernstein and KeyBanc had already moved to Hold on Nov. 12, as had Evercore ISI, Oppenheimer, William Blair and Melius.
NVIDIA’s CEO Search Has No End Date
NVIDIA’s board opened an investigation on Nov. 8 into reports that Huang had been the target of a foreign intelligence effort. On Nov. 12, the company announced that he had resigned. CFO Colette Kress is interim CEO while the board weighs internal and external candidates.
HSBC’s Second Worry Is Washington
Lee’s first reason is the obvious one. “We believe the uncertainties will prevail until a permanent succession plan is laid out and the new CEO is able to demonstrate execution capabilities,” he wrote in a note to clients.
His second is export rules. About 11% of NVIDIA’s revenue over the last six quarters came from countries outside the US and Taiwan, which Lee sees as likely targets for tighter controls. In HSBC’s bear case, losing 11% of fiscal 2028 revenue would cut that year’s EPS by 13%, to $13.57 from its $15.65 base case.
The Information reported that the Commerce Department is preparing a rule to stop Chinese AI companies from remotely accessing advanced chips abroad, extending chip controls to seven more countries, including Malaysia, Singapore and Thailand.
TIKR Tracks 61 Analysts on NVIDIA. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on NVIDIA, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See NVIDIA’s Analyst Ratings
Does $170 Add Up?
The Street’s average target was $305 on Nov. 12, about 88% above Friday afternoon’s price and up from $232 a year ago.
Earnings estimates have held up, too. Analysts expect $15.85 a share in fiscal 2028, up from $12.82 three months ago. Even HSBC’s bear case is well above the $9.32 they expect for this fiscal year.
The multiple is what fell. NVIDIA traded at about 14x forward earnings at the Nov. 12 close, its lowest in five years and far below its 36x five-year average.
HSBC’s $170 is about 10.9x its own $15.65 fiscal 2028 EPS forecast, or 10.7x the $15.85 consensus. A year from now, investors will value NVIDIA mostly on fiscal 2029, so even flat earnings would leave $170 at a lower forward multiple than today’s.
A Harsh Target for a Stock This Cheap
The near-term risk is a soft outlook on Nov. 17, NVIDIA’s first report without Huang. Dan Niles of Niles Investment Management wrote on X that “the new interim CEO will probably want to set a low bar.”
Still, $170 looks too harsh to me. On Aug. 26, Kress guided for about 70% revenue growth in fiscal 2028, with gross margin bottoming at 71% to 72% in the January quarter. If she holds both on Nov. 17, the multiple has room to recover. If she backs off the 70%, HSBC’s call starts to look right.
So What Is NVIDIA Stock Actually Worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
