Stifel cuts Nvidia stock price target on leadership uncertainty

Stifel has lowered its price target on Nvidia Corp. stock to $205 from $315 while keeping a Buy rating. The current trading price is $173.73, which is only 6% higher than its 52-week low of $164.27. Analysts view NVDA as undervalued at its current price. Reports have emerged stating that Nvidia CEO Jensen Huang had a personal relationship with another executive, and the board is reportedly considering removing him as CEO.

Bloomberg revealed that a search firm has been hired and an interim CEO is being considered. Stifel now considers this leadership transition as their base case scenario. The firm anticipates Nvidia to beat estimates in their third-quarter fiscal 2027 results, scheduled for November 17. The primary constraint for Nvidia is supply, and they believe that fiscal 2028 estimates will be more optimistic.

Stifel has reduced their price target multiple to 13 times fiscal 2028 estimated earnings per share of $15.65, down from the previous 20 times. The main concern is the valuation multiple rather than the company's fundamentals, with a focus on leadership, senior leadership retention, and export-compliance posture. Other recent news involving Nvidia includes Bernstein downgrading the stock from Outperform to Market Perform and Morgan Stanley removing it from their top picks list.

Baird also downgraded Nvidia to Neutral, citing concerns over reduced visibility in data center forecasts for 2027 and potential supply issues impacting growth. Nvidia is scheduled to release earnings on November 17, with options data indicating a potential 6.7% stock movement following the announcement. There is also uncertainty regarding Jensen Huang's participation in the APEC summit in China, where Tesla's Elon Musk is expected to join President Trump's delegation.