Key Takeaways
- NVIDIA stock is down 29% from its October closing high. Reports tied CEO Jensen Huang to a suspected Chinese spy, and the company’s board has opened an investigation.
- Bernstein kept its Outperform rating and $400 price target, 137% above the Nov. 10 close, and its analyst says the call depends on Huang staying.
- The analysts’ consensus target is $327, and their earnings estimates for the year ending January 2028 keep rising.
- Bernstein’s target implies 33x forward earnings, below NVIDIA’s five-year average of 36x, so the call holds up on the numbers, and a change at the top is the bigger risk.
NVIDIA (NVDA) closed at $168.80 on Nov. 10, down 29% from its Oct. 6 closing high, as questions about CEO Jensen Huang pile up. Bernstein’s Stacy Rasgon still sees 137% upside to his $400 price target, as long as Huang keeps his job.
Two weeks of bad headlines
The New York Times first reported on Oct. 29 that U.S. intelligence had concluded Alice Huang, a former executive at NVIDIA customer Megaspeed, passed information to Beijing. An NVIDIA spokesperson told the Times at the time that Huang’s interactions with Alice Huang were “not unusual or unexpected,” and China’s embassy denied the allegations. Then the midterms added a second worry, with former White House AI czar David Sacks saying he’s “really worried about 2028” for data center spending.
On Nov. 8, NVIDIA’s board opened an independent investigation into reports that Huang was the target of a foreign intelligence effort, and Huang apologized to employees for being unfaithful to his wife. The board said it still has confidence in him. Then came a shareholder class action on Nov. 9, a report from The Information on Nov. 10 that the relationship helped move $7.5 billion of NVIDIA chips to Chinese firms, and word from House Foreign Affairs chair Brian Mast that he’d “absolutely” consider a subpoena if Huang doesn’t respond to lawmakers by Nov. 11.
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Bernstein is betting on Huang staying
Rasgon kept his Outperform rating and $400 target in a note after the board’s announcement. He doesn’t expect the scandal to hurt demand for NVIDIA’s chips, but said the headlines would be a “heavy distraction” at the very best. Bernstein also flagged key-man risk, since Huang has about 60 direct reports and it isn’t clear who would step in.
Rasgon spelled out the condition to Yahoo Finance’s Deirdre Bosa in an interview: “If he stays, then this is going to prove to be overdone, and this will be a strong buying opportunity. But if he doesn’t stay, it’s going to be a problem.”
Does $400 add up?
The consensus target is $327, 94% above the Nov. 10 close and up from $230 a year ago:
Targets run from $180 to $515, so Bernstein sits near the top. Not every bull is holding firm: on Nov. 10, Citi cut its target to $285 from $315 and Wells Fargo cut to $300 from $315, though both kept Buy-equivalent ratings. Estimates keep climbing, too: analysts see $15.93 a share for the year ending January 2028, up from $12.84 three months ago, with CFO Colette Kress guiding to about 70% revenue growth that year.
None of the news so far has touched those estimates. Yet the stock traded at 15x forward earnings at the Nov. 9 close, its lowest in five years, against a five-year average of 36x:
At the Nov. 10 close, it’s even lower, at about 14x. Divide Bernstein’s $400 by the $12.10 a share analysts expect over the next twelve months, and the target asks for 33x, still below that average.
Too cheap, even with the Huang risk
If the board’s findings cost Huang his job, NVIDIA loses the person who sets its strategy, and lawmakers have fresh reasons to push tougher limits on chip sales to China.
Bottom line: at about 14x earnings, the stock already prices in a lot of bad news, and Bernstein’s $400 doesn’t need NVIDIA anywhere near its old multiples. On the numbers, Rasgon’s case holds up, and the bigger threat to his target is a change at the top. The next tests are NVIDIA’s Nov. 17 report and whether Huang attends the Nov. 18 House briefing lawmakers requested.
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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!
