Wall Street downgrades Nvidia rating, lowers target price to $200

Wall Street's attitude toward Nvidia has begun to soften. An investigation into CEO Jensen Huang is causing the market to have doubts about the prospects of this AI chip manufacturer. Jensen Huang previously disclosed details about the matter to employees in an internal memo. Several days later, Baird downgraded Nvidia's rating to neutral, while Morgan Stanley removed it from its preferred stock list. Baird analyst Tristan Gerra stated that the company will adopt a more cautious stance until uncertainties regarding possible actions by the US government, the outcome of the upcoming congressional hearing, the conclusions of the US government’s investigation, short-term adjustments to risk channels, the quantification of the potential impact of expenses on revenue, and the clarity of Jensen Huang’s job prospects are resolved. Gerra also slashed Nvidia’s target price from $500 to $200. The stock closed at $168.89 on Tuesday, falling by around 10% over the last two trading days. Although Morgan Stanley remains optimistic about Nvidia, analyst Joseph Moore said that short-term uncertainties will persist, as Jensen Huang’s leadership is crucial to the company’s strategic direction.