Oppenheimer downgrades Nvidia stock rating on CEO departure reports

Oppenheimer has reduced Nvidia's stock rating from "Outperform" to "Perform" in response to reports suggesting the imminent departure of the company's founding CEO, Jensen Huang. The stock is currently trading at $173.73, near its lowest point of the past year, and has fallen 4.3% in the past week. Oppenheimer analyst Rick Schafer cited Huang's alleged relationship with a Chinese spy and another executive as reasons for the board's potential move to part ways with him.

This comes amid additional allegations of Huang's relationship with a Nvidia employee, which the firm believes could pose a significant threat to the company's innovative pace should Huang depart without a clear successor. While Oppenheimer acknowledges potential upside in Nvidia's upcoming third-quarter earnings report and fourth-quarter outlook, the firm suggests that near-term fundamentals could take a backseat to these uncertainties.

The analyst maintains their 2026, 2027, and 2028 earnings per share estimates, considering any future impacts on Nvidia's outlook. Analysts at multiple firms, including Stifel, The Wall Street Journal, and Bloomberg, have also downgraded Nvidia's price target due to leadership uncertainty. Additionally, Nvidia is facing a search for an interim CEO and an independent investigation into Huang's actions, which could further impact the company's future.